Asian Paints Ltd Sees Heavy Call Option Activity Amid Bearish Price Action

Asian Paints’ Recent Price Performance and Market Context

Asian Paints Ltd. (NSE: ASIANPAINT) has been under pressure over the past three trading sessions, registering a cumulative decline of 8.56%. On 28 January 2026, the stock opened with a gap down of 3.35% and touched an intraday low of ₹2,451, representing a 6.55% drop from the previous close. This decline outpaced the paints sector’s fall of 3.4% and contrasted with the broader Sensex’s modest gain of 0.52% on the same day.

The stock is currently trading below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — indicating sustained downward momentum. Despite this, investor participation has risen notably, with delivery volumes on 27 January reaching 13.82 lakh shares, an 86.48% increase over the five-day average. This heightened activity suggests that market participants are positioning themselves ahead of potential near-term developments.

Robust Call Option Activity Signals Bullish Sentiment

Contrary to the bearish price action, Asian Paints has emerged as one of the most actively traded stocks in the call options segment. Data for the 24 February 2026 expiry reveals substantial volumes and open interest at strike prices above the current underlying value of ₹2,482.30, indicating a bullish tilt among options traders.

The most active call options are clustered around the ₹2,500, ₹2,600, and ₹2,700 strike prices. Specifically, the ₹2,600 strike saw the highest number of contracts traded at 6,725, generating a turnover of ₹477.31 lakh and an open interest of 2,135 contracts. The ₹2,700 strike followed closely with 5,229 contracts traded, ₹153.08 lakh turnover, and an open interest of 2,609 contracts. The ₹2,500 strike also recorded significant activity with 5,026 contracts traded and a turnover of ₹826.40 lakh, albeit with a lower open interest of 1,059 contracts.

This concentration of call option activity at strikes above the current market price suggests that traders are anticipating a rebound or upward movement in Asian Paints’ share price over the coming month. The open interest figures further reinforce this view, as they reflect positions held by market participants expecting the stock to surpass these strike levels by expiry.

Mojo Score Downgrade Reflects Caution

MarketsMOJO’s latest assessment downgraded Asian Paints from a Buy to a Hold rating on 16 January 2026, assigning a Mojo Score of 67.0. The downgrade reflects concerns over the stock’s recent underperformance and the broader sectoral headwinds. The company retains a Market Cap Grade of 1, underscoring its status as a large-cap heavyweight with a market capitalisation of ₹2,51,924 crore.

While the downgrade signals caution, the divergence between the stock’s technical weakness and the bullish options positioning highlights a nuanced market sentiment. Investors may be weighing short-term challenges against the company’s long-term fundamentals and growth prospects.

Expiry Patterns and Implications for Asian Paints

The 24 February 2026 expiry date is attracting significant attention, with call options turnover aggregating over ₹1,456 lakh across the three key strike prices. The clustering of open interest at higher strikes suggests that traders are positioning for a potential recovery in the stock price within the next four weeks.

However, the stock’s recent underperformance and failure to hold above critical moving averages imply that any upside may face resistance. The weighted average price during the latest trading session was closer to the intraday low, indicating selling pressure near current levels. This dynamic creates a scenario where bullish option bets could be speculative or hedging strategies rather than outright directional conviction.

Investors should also consider the broader sectoral context, as the paints industry has declined by 3.4% recently, reflecting challenges such as raw material cost inflation and subdued demand in certain end markets. Asian Paints’ ability to outperform or stabilise will depend on its operational execution and market conditions in the coming weeks.

Liquidity and Trading Considerations

Asian Paints remains a highly liquid stock, with average traded value supporting trade sizes up to ₹9.67 crore based on 2% of the five-day average. This liquidity facilitates active participation from institutional and retail investors alike, enabling efficient price discovery and option market activity.

The elevated delivery volume and open interest in call options underscore the stock’s attractiveness for both directional and hedging trades. Market participants should monitor price action closely, especially around the key strike prices of ₹2,500, ₹2,600, and ₹2,700, to gauge the evolving sentiment and potential breakout or breakdown scenarios.

Outlook and Investor Takeaways

Asian Paints Ltd. currently presents a mixed picture. The stock’s technical weakness and recent downgrade to a Hold rating by MarketsMOJO reflect caution amid sectoral pressures and near-term headwinds. Yet, the robust call option activity at strikes above the current market price indicates that a segment of the market remains optimistic about a potential rebound.

Investors should weigh these contrasting signals carefully. The elevated open interest and turnover in call options may represent speculative positioning or hedging strategies rather than a consensus bullish view. Given the stock’s failure to sustain above key moving averages and the paints sector’s recent softness, a cautious approach is warranted.

Monitoring price action around the ₹2,500 to ₹2,700 range will be critical in the coming weeks. A sustained move above these levels could validate the bullish option bets and signal a recovery. Conversely, further declines may pressure option premiums and reinforce the Hold rating.

Ultimately, Asian Paints’ large-cap status and market leadership provide a solid foundation, but investors should remain vigilant to evolving market dynamics and sectoral trends before committing fresh capital.

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