CG Power & Industrial Solutions Sees Surge in Call Option Activity Amid Bullish Rebound

Robust Call Option Activity Highlights Bullish Sentiment

The heavy electrical equipment company witnessed an impressive 9,668 call option contracts traded at the ₹600 strike price for the expiry dated 27 January 2026. This activity generated a turnover of approximately ₹1300.06 lakhs, underscoring strong investor interest in leveraged bullish bets. Open interest currently stands at 2,391 contracts, indicating sustained positions rather than short-term speculative trades.

The underlying stock, CGPOWER, closed at ₹595.20, just shy of the ₹600 strike, suggesting that traders are anticipating a breakout above this key resistance level within the next week. The concentration of call options at this strike price and expiry date reflects a consensus expectation of upward momentum in the near term.

Price Action and Technical Context

CG Power & Industrial Solutions Ltd outperformed its sector by 6.06% on the day, a notable advance compared to the sector’s modest 0.15% gain and the Sensex’s decline of 0.52%. The stock reversed a nine-day losing streak, opening with a gap up of 3.26% and touching an intraday high of ₹607, representing an 8.06% rise from the previous close.

Technically, the stock is trading above its 5-day moving average but remains below its 20-day, 50-day, 100-day, and 200-day moving averages. This mixed technical picture suggests that while short-term momentum is positive, medium- and long-term trends require confirmation. The rising delivery volume of 36.12 lakhs on 16 January, up 11.14% from the five-day average, indicates growing investor participation and confidence in the stock’s recovery.

Market Capitalisation and Fundamental Assessment

CG Power & Industrial Solutions Ltd is classified as a large-cap stock with a market capitalisation of ₹88,485 crores. Despite its size, the company’s Mojo Score has recently been downgraded from a Buy to a Hold rating as of 21 November 2025, reflecting a more cautious stance amid mixed fundamental signals. The Market Cap Grade remains at 1, indicating a strong market presence but also signalling the need for investors to weigh valuation and growth prospects carefully.

Expiry Patterns and Investor Positioning

The expiry on 27 January 2026 is attracting the bulk of call option interest, with the ₹600 strike price serving as a focal point for bullish bets. This expiry is less than ten days away, suggesting that traders expect the stock to breach this level imminently. The open interest data corroborates this view, with a sizeable number of contracts still open, implying that investors are holding onto their positions rather than closing out.

Such concentrated activity in call options often precedes significant price moves, as traders leverage options to amplify gains in anticipation of positive catalysts. Given the stock’s recent reversal and volume uptick, the market appears to be pricing in a potential breakout, possibly driven by sectoral tailwinds or company-specific developments.

Comparative Sector and Market Analysis

Within the heavy electrical equipment sector, CG Power & Industrial Solutions Ltd’s performance stands out. While the sector recorded a marginal gain of 0.15%, CG Power’s 6.06% advance signals a divergence that may attract further investor attention. The Sensex’s decline of 0.52% on the same day highlights the stock’s relative strength amid broader market weakness.

Investors should note that despite the positive short-term momentum, the stock’s downgrade to a Hold rating by MarketsMOJO reflects underlying caution. The company’s fundamentals and valuation metrics warrant close monitoring, especially given the mixed signals from moving averages and the recent trend reversal.

Investor Takeaway and Outlook

CG Power & Industrial Solutions Ltd’s surge in call option activity and recent price rebound suggest a cautiously optimistic outlook among market participants. The stock’s ability to sustain gains above the ₹600 level in the coming days will be critical to confirming a bullish trend. Investors should balance the positive technical signals with the company’s Hold rating and monitor sector developments closely.

Given the stock’s liquidity, with a trading capacity of approximately ₹7.31 crores based on 2% of the five-day average traded value, institutional and retail investors alike can participate without significant market impact. However, the mixed moving average signals and recent downgrade advise a measured approach, favouring partial exposure or hedged positions.

Overall, the concentrated call option interest ahead of the 27 January expiry highlights a market expectation of upward price movement, making CG Power & Industrial Solutions Ltd a stock to watch closely in the heavy electrical equipment sector.

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