Open Interest and Volume Dynamics
On 23 Jan 2026, Ambuja Cements recorded an open interest (OI) of 85,032 contracts, up from 72,742 the previous day, marking an increase of 12,290 contracts or 16.9%. This rise in OI was accompanied by a futures volume of 71,474 contracts, indicating robust trading activity. The futures segment alone accounted for a notional value of approximately ₹1,66,315 lakhs, while the options segment's value was substantially higher at ₹23,787 crores, culminating in a total derivatives value exceeding ₹1,69,342 lakhs.
The underlying stock price closed at ₹518, having touched an intraday low of ₹515.25, down 5.74% on the day. This decline contrasts with the increased open interest, suggesting that new positions are being established amid falling prices, a classic hallmark of bearish accumulation or protective hedging.
Price and Trend Analysis
Ambuja Cements underperformed its sector by 4.15% and the Sensex by 4.44% on the day, with a one-day return of -5.66% compared to the sector's -1.51% and Sensex's -0.91%. The stock has reversed its short-term uptrend after two consecutive days of gains, now trading below all key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – signalling sustained downward momentum.
Weighted average price data reveals that most volume was transacted near the day's low, reinforcing selling pressure. Additionally, delivery volumes surged to 11.36 lakh shares on 22 Jan, a 28.93% increase over the five-day average, indicating rising investor participation but possibly more selling than buying interest.
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Market Positioning and Directional Bets
The sharp increase in open interest amid falling prices suggests that traders are either initiating fresh short positions or adding to existing ones, anticipating further downside. The futures and options data corroborate this view, with the options notional value vastly exceeding futures, indicating active hedging and speculative strategies using options instruments.
Given the stock’s Mojo Score of 37.0 and a downgrade from Hold to Sell on 10 Nov 2025, investor sentiment appears cautious. The Market Cap Grade of 1, despite Ambuja’s large-cap status with a market capitalisation of ₹1,27,459.58 crores, reflects concerns over valuation and near-term earnings prospects in the cement sector, which is facing headwinds from rising input costs and subdued demand.
Liquidity remains adequate, with the stock capable of handling trade sizes up to ₹1.9 crores based on 2% of the five-day average traded value, ensuring that institutional players can manoeuvre positions without excessive slippage.
Sector and Broader Market Context
The cement sector has been under pressure due to slowing infrastructure activity and rising energy costs, which have squeezed margins. Ambuja Cements’ underperformance relative to its sector peers and the Sensex highlights company-specific challenges, possibly linked to regional demand fluctuations or operational inefficiencies.
Investors should note that the stock’s current technical setup, combined with the surge in derivatives open interest, points to a cautious outlook. The increased delivery volumes suggest that long-term holders may be offloading shares, while short-term traders position for further declines.
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Implications for Investors
For investors, the current derivatives activity in Ambuja Cements signals a period of heightened volatility and uncertainty. The elevated open interest combined with declining prices typically indicates that market participants expect further downside or are hedging against adverse movements.
Given the stock’s downgrade to a Sell rating and its underperformance relative to sector and benchmark indices, cautious investors may consider reducing exposure or exploring alternative cement stocks with stronger fundamentals and technicals. The rising delivery volumes also suggest that institutional investors might be trimming positions, which could weigh on prices in the near term.
However, for traders, the increased liquidity and active derivatives market provide opportunities to capitalise on short-term price swings using futures and options strategies. Monitoring changes in open interest alongside price action will be crucial to gauge the evolving market sentiment.
Conclusion
Ambuja Cements Ltd’s recent surge in open interest amid a weakening price trend highlights a market environment where bearish bets and protective hedging dominate. The stock’s technical weakness, combined with a downgrade in its Mojo Grade to Sell, underscores the challenges facing the company and the cement sector at large.
Investors should remain vigilant, closely tracking derivatives activity and delivery volumes as indicators of market positioning. While the stock remains liquid enough for sizeable trades, the prevailing sentiment suggests a cautious stance until clearer signs of a fundamental or technical turnaround emerge.
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