Heavy Call Option Trading Signals Bullish Sentiment
On 29 January 2026, Canara Bank (NSE: CANBK) recorded an impressive 12,227 call option contracts traded at the ₹160 strike price, representing the highest call option volume among its peers. The turnover for these contracts reached ₹4382.46 lakhs, underscoring robust investor interest in bullish bets ahead of the 24 February expiry. Open interest at this strike stands at 3,185 contracts, indicating sustained positioning rather than short-term speculative spikes.
The underlying stock closed at ₹151.55, below the ₹160 strike, suggesting that traders are anticipating a potential upward move over the coming weeks. This optimism is further supported by Canara Bank’s recent 52-week high of ₹160.79, hit on the same day, signalling that the stock remains within striking distance of key resistance levels.
Price Action and Technical Indicators Paint a Mixed Picture
Despite the surge in call option activity, Canara Bank’s share price underperformed its sector and the broader market on the day. The stock declined by 4.76%, significantly lagging the Public Sector Bank sector’s marginal fall of 0.12% and the Sensex’s modest gain of 0.19%. Intraday, the stock touched a low of ₹149.60, down 5.16%, with the weighted average price of traded shares skewed towards the lower end of the day’s range. This suggests selling pressure amid the broader market volatility.
Technically, the stock remains above its 100-day and 200-day moving averages, which typically indicate medium- to long-term support. However, it trades below its 5-day, 20-day, and 50-day moving averages, signalling short-term weakness and a possible trend reversal after two consecutive days of gains. The delivery volume of 1.12 crore shares on 28 January fell by 6.79% compared to the five-day average, indicating a decline in investor participation and possibly cautious sentiment among long-term holders.
Market Capitalisation and Quality Metrics Support Positive Outlook
Canara Bank’s market capitalisation stands at ₹1,45,085 crore, categorising it as a mid-cap stock within the public sector banking space. The company’s Mojo Score of 75.0, upgraded from a previous Hold rating to a Buy on 28 January 2026, reflects improved fundamentals and positive momentum. Despite a modest Market Cap Grade of 2, the upgrade signals growing confidence in the bank’s earnings prospects and operational performance.
Investors should note that the stock’s liquidity remains adequate, with a trade size capacity of approximately ₹7.95 crore based on 2% of the five-day average traded value. This ensures that sizeable positions can be entered or exited without significant price impact, an important consideration for institutional investors and options traders alike.
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Expiry Patterns and Strike Price Concentration
The concentration of call option activity at the ₹160 strike price expiring on 24 February 2026 is particularly noteworthy. This strike is just above the current market price, indicating that traders are positioning for a moderate upside within the next month. The expiry date aligns with the bank’s upcoming quarterly results season, which could act as a catalyst for price movement depending on earnings performance and guidance.
Open interest data reveals that the ₹160 strike has maintained elevated levels over recent sessions, suggesting that investors are not merely speculating but are holding positions in anticipation of a meaningful price move. This pattern is consistent with a bullish outlook, as call options provide leveraged exposure to upside potential while limiting downside risk to the premium paid.
Sector and Market Context
Within the Public Sector Bank sector, Canara Bank’s recent underperformance contrasts with the broader market’s resilience. The sector’s marginal decline of 0.12% and the Sensex’s positive return of 0.19% on the same day highlight selective weakness in Canara Bank’s shares. This divergence may reflect company-specific concerns or profit-taking after recent gains.
However, the bank’s upgrade to a Buy rating by MarketsMOJO, supported by a strong Mojo Score, suggests that analysts see value in the stock relative to its peers. The upgrade from Hold to Buy on 28 January 2026 was driven by improved financial metrics and a more favourable outlook on asset quality and credit growth prospects.
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Investor Implications and Outlook
For investors and traders, the heightened call option activity in Canara Bank offers a clear signal of bullish sentiment, albeit tempered by recent price weakness. The strike price concentration near ₹160 and the expiry in late February suggest that market participants expect the stock to test or surpass this level within the next four weeks.
However, the short-term technical indicators caution against an immediate rally, given the stock’s trading below key moving averages and falling delivery volumes. This mixed technical and options data profile implies that while optimism exists, it is balanced by profit-taking and uncertainty.
Long-term investors may find value in the recent upgrade and the bank’s solid fundamentals, while options traders can consider strategies that capitalise on the expected volatility around the upcoming expiry. Monitoring open interest changes and price action in the coming sessions will be crucial to gauge the sustainability of the bullish positioning.
Summary
Canara Bank’s call option market activity reveals a strong bullish bias, with significant volumes and open interest at the ₹160 strike expiring in February 2026. Despite this, the underlying stock price has shown short-term weakness, underperforming its sector and broader indices. The recent upgrade to a Buy rating and a robust Mojo Score of 75.0 support a positive medium-term outlook, but investors should remain cautious given the mixed technical signals and declining investor participation.
Overall, Canara Bank remains a compelling mid-cap stock within the public sector banking space, attracting both fundamental and derivative market interest as it navigates near-term volatility and potential catalysts.
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