Asian Paints Sees Robust Call Option Activity Amid Bullish Market Sentiment

Robust Call Option Activity Highlights Investor Optimism

Asian Paints Ltd. (NSE: ASIANPAINT) has emerged as the most active stock in call options trading, with the 2800 strike price call options expiring on 27 January 2026 attracting significant volumes. On 23 January 2026, a total of 14,810 contracts were traded, generating a turnover of ₹389.13 lakhs. The open interest at this strike stands at 2,368 contracts, reflecting sustained investor interest in this bullish position.

The underlying stock price was ₹2,764.40 at the time, indicating that the 2800 strike calls are slightly out-of-the-money but within striking distance, suggesting traders anticipate a rally beyond this level before expiry. This positioning is consistent with a moderately bullish outlook, as investors appear to be hedging for or speculating on a near-term upside move.

Price Performance and Technical Indicators Support Positive Momentum

Asian Paints has outperformed its sector by 0.63% on the day, registering a 2.30% gain, while the broader Sensex declined by 0.28%. The stock has been on a two-day consecutive gain streak, delivering a cumulative return of 3.87% over this period. Intraday, it touched a high of ₹2,782.90, up 2.93% from the previous close, signalling strong buying interest.

From a technical perspective, the stock is trading above its 5-day, 100-day, and 200-day moving averages, indicating a solid long-term uptrend. However, it remains below the 20-day and 50-day moving averages, suggesting some near-term resistance and potential consolidation before a sustained breakout. This mixed technical picture aligns with the cautious optimism reflected in the call option activity.

Rising Delivery Volumes and Liquidity Confirm Investor Engagement

Investor participation has increased notably, with delivery volumes rising to 7.8 lakh shares on 22 January 2026, a 20.78% increase compared to the five-day average. This uptick in delivery volume indicates genuine accumulation rather than speculative trading, reinforcing the bullish narrative.

Liquidity remains robust, with the stock’s traded value supporting trade sizes up to ₹6.38 crore based on 2% of the five-day average traded value. Such liquidity ensures that institutional and retail investors can execute sizeable trades without significant price impact, further encouraging active participation in both the cash and derivatives markets.

Mojo Score Downgrade Reflects Caution Despite Positive Price Action

Despite the bullish price action and option market activity, Asian Paints’ mojo score was downgraded from a 'Buy' to a 'Hold' on 16 January 2026, with a current mojo score of 67.0. The downgrade reflects a more cautious stance based on a comprehensive analysis of financial metrics, valuation, and sector dynamics.

The company retains a market cap grade of 1, indicating its status as a large-cap heavyweight with a market capitalisation of ₹2,62,820 crore. However, the downgrade suggests that while the stock remains fundamentally strong, near-term catalysts may be limited or valuation concerns have increased, warranting a more measured approach.

Sector and Market Context

Asian Paints operates within the paints industry, a sector that has shown resilience amid fluctuating raw material costs and evolving consumer demand. The stock’s outperformance relative to the sector’s 1.64% gain on the day highlights its relative strength and investor preference.

In comparison, the Sensex’s marginal decline of 0.28% underscores the stock’s defensive qualities and its ability to attract capital even in broader market weakness. This relative strength is a key factor driving the elevated call option interest, as investors seek exposure to stocks with strong fundamentals and technical momentum.

Expiry Patterns and Strike Price Selection

The concentration of call option activity at the 2800 strike price for the 27 January expiry is particularly telling. This strike is approximately 35.6 points above the current underlying price, representing a 1.3% premium. Such positioning suggests traders are betting on a modest but meaningful price appreciation within the next four trading days.

Open interest at this strike remains elevated, indicating that many positions are being held rather than closed, which could translate into increased volatility as expiry approaches. Traders should monitor price action closely, as a move above 2800 could trigger further short-covering and speculative buying in the options market.

Implications for Investors and Traders

For investors, the combination of strong delivery volumes, rising prices, and active call option trading signals a cautiously optimistic outlook for Asian Paints in the near term. However, the mojo grade downgrade advises prudence, suggesting that investors should weigh valuation and sector risks carefully.

Traders focusing on derivatives may find opportunities in the current elevated liquidity and open interest, particularly around the 2800 strike calls. The stock’s technical setup, with support from longer-term moving averages, provides a foundation for potential upside, but resistance near the 20-day and 50-day averages could cap gains in the short term.

Conclusion: Balanced Outlook Amid Active Derivatives Market

Asian Paints Ltd. remains a focal point for investors and traders alike, with its active call option market signalling bullish sentiment despite a recent mojo grade downgrade. The stock’s strong price performance, rising delivery volumes, and robust liquidity underpin a positive near-term outlook, while technical resistance and valuation considerations counsel caution.

Market participants should continue to monitor option open interest and price movements closely, especially as the 27 January expiry approaches. The interplay between fundamentals and derivatives activity will likely shape Asian Paints’ trajectory in the coming weeks, making it a key stock to watch within the paints sector and broader large-cap universe.

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