Bajaj Auto Ltd Sees Significant Open Interest Surge Amid Mixed Price Action

Open Interest and Volume Dynamics

The latest data reveals that Bajaj Auto's open interest (OI) in derivatives rose from 66,108 contracts to 73,394, an increase of 7,286 contracts or 11.02%. This surge is accompanied by a total volume of 1,29,196 contracts traded, indicating robust participation in the futures and options market. The futures segment alone accounted for a value of approximately ₹76,857.5 lakhs, while the options segment's notional value was substantially higher at ₹88,154.6 crores, culminating in a combined derivatives value of ₹89,839.2 lakhs.

Such a rise in OI, especially when paired with increased volume, often points to fresh positions being initiated rather than existing ones being squared off. This can imply that market participants are either building directional exposure or establishing hedges in anticipation of forthcoming price movements.

Price Action and Market Context

Bajaj Auto's underlying stock price closed at ₹9,486, approximately 4.29% below its 52-week high of ₹9,888. On the day in question, the stock experienced a volatile session, touching an intraday high of ₹9,855 (+2.68%) and a low of ₹9,175.5 (-4.4%). The weighted average price skewed closer to the day's low, suggesting selling pressure towards the end of trading hours.

Notably, the stock's price remains above its 5-day, 50-day, 100-day, and 200-day moving averages but below the 20-day moving average, indicating a short-term correction within a longer-term uptrend. The recent two-day rally was halted by the day's decline, signalling potential profit-taking or cautious positioning by investors.

Investor participation has also risen, with delivery volumes on 30 Jan reaching 1.6 lakh shares, a 15.24% increase over the five-day average. This heightened delivery volume underscores genuine interest in the stock beyond speculative trading.

Market Positioning and Directional Bets

The increase in open interest alongside a decline in the stock price suggests that new short positions may be accumulating, or alternatively, that protective puts are being purchased to hedge existing long exposure. The large notional value in options indicates active participation in both calls and puts, reflecting a market bracing for volatility.

Given Bajaj Auto's Mojo Score of 67.0 and an upgraded Mojo Grade from Sell to Hold as of 22 Dec 2025, the stock is currently viewed with cautious optimism. The market cap grade remains at 1, reflecting its status as a large-cap stock with substantial liquidity and institutional interest.

Comparatively, the stock's 1-day return of -1.40% outperformed the sector's decline of -1.75% and the Sensex's fall of -1.03%, indicating relative resilience amid broader market weakness.

Technical Indicators and Investor Sentiment

Technical analysis reveals that Bajaj Auto is trading above key long-term moving averages, which typically act as support levels. However, the dip below the 20-day moving average and the day's weighted average price leaning towards the low end suggest short-term caution. The rising delivery volumes reinforce that investors are not merely trading intraday but are willing to hold positions, signalling confidence in the stock's medium-term prospects.

Liquidity metrics confirm that the stock is sufficiently liquid to accommodate sizeable trades, with a 5-day average traded value supporting trade sizes up to ₹5.92 crores without significant market impact.

Implications for Investors

For investors, the surge in open interest combined with mixed price action suggests a period of consolidation and potential volatility ahead. The derivatives market activity indicates that traders are positioning for a directional move, but the exact bias remains ambiguous given the conflicting signals from price and volume data.

Investors should monitor the evolution of open interest and volume in the coming sessions to discern whether the market is leaning towards a bullish breakout or a bearish correction. The stock’s proximity to its 52-week high and its relative strength compared to the sector and benchmark indices provide a foundation for cautious optimism.

Given the current Hold rating and the recent upgrade from Sell, Bajaj Auto appears to be in a transitional phase where selective accumulation may be warranted, particularly for investors with a medium-term horizon and a tolerance for short-term volatility.

Broader Market Context

The automobile sector has been navigating a complex environment marked by fluctuating commodity prices, supply chain challenges, and evolving consumer demand. Bajaj Auto, as a leading player, reflects these dynamics in its stock performance and derivatives activity. The increased open interest may also be influenced by macroeconomic factors such as interest rate expectations and regulatory developments impacting the sector.

Overall, the derivatives market data for Bajaj Auto provides valuable insight into investor sentiment and potential future price movements, underscoring the importance of integrating open interest analysis with fundamental and technical assessments.

Conclusion

Bajaj Auto Ltd.’s recent open interest surge of 11.02% in derivatives, coupled with increased trading volumes and mixed price signals, highlights a market in flux. While the stock remains near its 52-week high and retains a Hold rating with a Mojo Score of 67.0, investors should remain vigilant to evolving market cues. The interplay of fresh positioning and hedging activity suggests that traders are preparing for significant moves, making it essential to track subsequent sessions closely for clearer directional confirmation.

Unlock special upgrade rates for a limited period. Start Saving Now →