Eternal Ltd Sees Surge in Call Option Activity Amid Mixed Technical Signals

Robust Call Option Activity Highlights Investor Sentiment

On the expiry date of 27 Jan 2026, Eternal Ltd’s call options with a strike price of ₹270 emerged as the most actively traded contracts. A total of 3,844 contracts changed hands, generating a turnover of ₹19.58 lakhs. The open interest stood at 1,429 contracts, indicating sustained interest from traders holding bullish bets on the stock.

Given the underlying stock price of ₹260.7, the ₹270 strike represents a moderately out-of-the-money position, suggesting that investors are anticipating a potential upside move beyond this level before expiry. This heightened call option activity often reflects optimism about near-term price appreciation or hedging strategies against expected volatility.

Stock Performance and Technical Landscape

Despite the surge in call option volumes, Eternal Ltd’s stock performance presents a nuanced picture. The stock outperformed its sector by 0.31% on the day, registering a modest 0.04% gain compared to the sector’s 0.01% and the Sensex’s 0.37% rise. This slight outperformance follows a two-day decline, signalling a potential trend reversal.

However, the technical indicators remain cautious. Eternal is trading below its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, reflecting a persistent bearish momentum over multiple timeframes. Falling investor participation is also evident, with delivery volumes on 23 Jan 2026 dropping by 1.78% against the five-day average, suggesting reduced conviction among long-term holders.

Liquidity remains adequate, with the stock’s traded value supporting a trade size of approximately ₹56.28 crores based on 2% of the five-day average traded value, ensuring that option and stock trades can be executed without significant market impact.

Mojo Score and Grade Reflect Caution

Eternal Ltd currently holds a Mojo Score of 37.0, categorised under a Sell grade as of 23 Oct 2025, a downgrade from its previous Hold rating. This downgrade reflects deteriorating fundamentals or technical outlooks as assessed by MarketsMOJO’s proprietary scoring system. The company’s market cap grade is 1, indicating a large-cap status with a market capitalisation of ₹2,49,606 crores, underscoring its significant presence in the E-Retail/E-Commerce sector.

The downgrade and low Mojo Score suggest that despite the recent bullish option activity, investors should exercise caution and consider the broader fundamental and technical context before increasing exposure.

Expiry Patterns and Strike Price Analysis

The expiry date of 27 Jan 2026 saw concentrated activity at the ₹270 strike price, which is approximately 3.5% above the current underlying price. This strike level is a critical threshold for traders betting on a short-term rebound. The open interest of 1,429 contracts at this strike indicates a sizeable number of traders are either holding or initiating positions expecting the stock to breach this level.

Such positioning often precedes volatility around expiry, as traders adjust or close positions based on price movements. The high turnover in call options relative to the underlying stock’s liquidity suggests speculative interest or hedging strategies by institutional participants.

Sector Context and Comparative Performance

Within the E-Retail/E-Commerce sector, Eternal Ltd’s slight outperformance on the day contrasts with its overall technical weakness. The sector itself has shown modest gains, but Eternal’s trading below all major moving averages indicates it is lagging behind peers in momentum terms. This divergence may attract opportunistic traders looking to capitalise on potential rebounds or volatility ahead of earnings or sectoral catalysts.

Investors should weigh the company’s large-cap status and market leadership against the current bearish technical signals and the recent downgrade in analyst sentiment.

Investor Takeaway: Balancing Bullish Option Interest with Caution

The surge in call option activity at the ₹270 strike price for Eternal Ltd signals a degree of bullish sentiment among traders anticipating a price recovery or breakout in the near term. However, the stock’s position below all major moving averages and the recent downgrade to a Sell rating by MarketsMOJO counsel prudence.

Investors should monitor upcoming earnings announcements, sector developments, and broader market trends that could influence Eternal’s trajectory. The current option market activity may reflect speculative positioning or hedging rather than a definitive directional conviction.

Given the stock’s large-cap status and liquidity, it remains a viable candidate for strategic trades, but a cautious approach with defined risk management is advisable until clearer technical or fundamental signals emerge.

Looking Ahead: Monitoring Expiry and Market Sentiment

As the 27 Jan 2026 expiry concludes, the evolution of open interest and price action around the ₹270 strike will be critical to watch. A sustained move above this level could validate the bullish option positioning and potentially trigger further upside momentum. Conversely, failure to breach this strike may lead to profit-taking and increased volatility.

Market participants should also consider the broader macroeconomic environment and sector-specific trends impacting E-Retail and E-Commerce companies, which remain sensitive to consumer spending patterns and digital adoption rates.

Summary

Eternal Ltd’s recent call option activity highlights a complex interplay between bullish trader positioning and underlying technical weakness. While the stock shows signs of a potential short-term rebound, the downgrade in analyst sentiment and trading below key moving averages suggest caution. Investors should balance these factors carefully, leveraging detailed peer comparisons and market insights to inform their decisions.

Upgrade at special rates, valid only for the next few days. Claim Your Special Rate →