Avenue Supermarts Declines 8.32% Amid Rising Put Option Activity and Technical Pressure

29 June 2026: Week Begins with Stable Price Amid Market Calm

The week commenced with Avenue Supermarts closing at Rs.4,355.45 on 29 June 2026, with no significant price movement reported. The Sensex closed at 35,960.98, setting a neutral baseline for the week. Trading volumes were moderate at 12,314 shares, indicating steady investor interest ahead of a volatile week.

1 July 2026: Intraday Low and Sharp Open Interest Surge Signal Early Pressure

On 1 July, Avenue Supermarts faced notable price pressure, closing down 1.04% at Rs.4,332.85 after hitting an intraday low of Rs.4,224, a 3.53% drop from the previous close. This decline contrasted with the Sensex’s 0.45% gain to 36,119.01, highlighting stock-specific weakness amid a broadly positive market.

Derivatives activity intensified with a 20.67% surge in open interest, rising from 23,682 to 28,577 contracts, alongside a total volume of 31,148 contracts traded. The futures and options segments combined for a notional value exceeding ₹45,443.17 lakhs, reflecting heightened market participation and positioning shifts. Despite the price dip, the stock remained above its 20-day, 50-day, 100-day, and 200-day moving averages, though below the 5-day average, indicating short-term consolidation within a longer-term uptrend.

Investor participation showed signs of waning with delivery volumes dropping 30.6% to 2.21 lakh shares on 30 June, suggesting some profit-booking or reduced conviction among long-term holders.

2 July 2026: Continued Price Weakness Amid Rising Derivatives Activity

The downward momentum intensified on 2 July as Avenue Supermarts’ stock price declined by 3.34% to close at Rs.4,187.95, touching an intraday low of Rs.4,189.90. This underperformance was sharper than the diversified retail sector’s 2.75% fall, despite the Sensex advancing 0.71% to 36,376.02. The stock’s two-day cumulative loss reached 4.05%, signalling sustained selling pressure.

Open interest surged further by 31.85% to 35,373 contracts, with total volume climbing to 40,337 contracts. The combined derivatives turnover reached ₹62,603.11 lakhs, underscoring robust market activity. Delivery volumes rebounded strongly to 4.36 lakh shares on 1 July, a 64.06% increase over the five-day average, indicating renewed investor conviction despite price softness.

Technically, the stock remained above its longer-term moving averages but below the 5-day and 50-day averages, reflecting short-term bearishness amid longer-term support. The divergence between short- and long-term indicators suggests a consolidation phase amid sectoral headwinds.

3 July 2026: Sharp Decline, Heavy Trading, and Bearish Put Option Activity

The final trading day of the week saw Avenue Supermarts plunge 4.65% to Rs.3,993.20, marking the third consecutive day of losses and a cumulative decline of 8.62% over this period. The stock hit an intraday low of Rs.3,995.1, with high volatility reflected in a 21.16% intraday price range. This sharp fall contrasted with the Sensex’s 0.15% gain to 36,431.45, highlighting a stark divergence from broader market strength.

Trading volumes surged to 7,92,473 shares, generating a traded value of approximately ₹31,773.57 lakhs, placing DMART among the most actively traded stocks by value. Delivery volumes soared to 6.75 lakh shares on 2 July, a 135.77% increase over the five-day average, signalling heightened institutional or long-term investor activity amid the sell-off.

Put option activity intensified ahead of the 28 July expiry, with the 4000 strike price put options recording 3,196 contracts traded and a turnover of ₹709.22 lakhs, while the 3900 strike price saw 1,536 contracts traded. This heavy put buying indicates growing bearish sentiment and hedging demand near critical support levels.

Open interest in derivatives rose by 22.45% to 44,451 contracts, with a total derivatives value exceeding ₹53,789 lakhs. The stock traded below all major moving averages—5-day through 200-day—signalling a clear technical downtrend and weakening momentum.

Weekly Price Performance: Stock vs Sensex

Key Takeaways

Significant Underperformance: Avenue Supermarts declined 8.32% over the week, sharply underperforming the Sensex’s 1.31% gain. The stock’s three-day losing streak from 1 July onwards was marked by steep intraday lows and sustained selling pressure.

Rising Derivatives Activity: Open interest surged by over 75% during the week, with notable spikes on 1, 2, and 3 July. Heavy put option volumes at strike prices near Rs.4,000 indicate growing bearish sentiment and hedging demand ahead of the 28 July expiry.

Technical Weakness: The stock breached all major moving averages by 3 July, signalling a clear downtrend. Short-term moving averages acted as resistance, while longer-term averages failed to provide support amid heavy selling.

Investor Participation Mixed: Delivery volumes fluctuated, with a sharp drop on 30 June followed by strong rebounds on 1 and 2 July, suggesting a mix of profit-taking and selective accumulation by institutional investors.

Valuation Moderation: The company’s valuation shifted from 'very expensive' to 'expensive' with a P/E of 91.96 and P/BV of 11.17, reflecting a cautious reassessment of growth prospects amid recent price weakness.

Conclusion

Avenue Supermarts Ltd’s week was characterised by pronounced volatility and a clear downtrend, driven by sectoral headwinds, technical breakdowns, and heightened bearish positioning in derivatives markets. Despite a broadly positive Sensex, the stock’s sharp decline and heavy put option activity signal investor caution and potential near-term volatility. The upgrade to a Hold rating with a Mojo Score of 60.0 reflects a balanced view acknowledging the company’s strong fundamentals but recognising immediate price pressures. Investors should monitor technical levels, open interest trends, and sector developments closely as the stock navigates this challenging phase.

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