Open Interest and Volume Dynamics
The latest data reveals that Havells India’s open interest (OI) in futures and options contracts rose sharply from 34,052 to 39,866 contracts, an increase of 5,814 contracts or 17.07% on 18 Feb 2026. This surge in OI was accompanied by a futures volume of 21,287 contracts, reflecting heightened activity in the derivatives market. The combined futures and options value stood at approximately ₹8,349.46 crores, with futures alone accounting for ₹831.04 crores and options contributing a substantial ₹6,846.02 crores.
Such a pronounced increase in open interest typically indicates fresh capital entering the market, suggesting that traders are either initiating new positions or adding to existing ones. However, the nature of these positions—whether bullish or bearish—requires further scrutiny given the stock’s recent price action and technical signals.
Price Performance and Technical Indicators
On the price front, Havells India underperformed its sector by 1.04% and the broader Sensex by 1.31% on the day of the OI surge, closing near an intraday low of ₹1,401.5, down 2.32%. This decline ended a 13-day streak of consecutive gains, signalling a potential trend reversal. The stock’s 1-day return was -2.16%, compared to the sector’s -1.32% and Sensex’s -0.85% losses.
Technically, the stock remains above its 20-day and 50-day moving averages but trades below its 5-day, 100-day, and 200-day moving averages. This mixed moving average alignment suggests short-term weakness amid longer-term support levels. The falling delivery volume, which dropped 4.08% to 2.49 lakh shares against the 5-day average, further indicates waning investor participation in the cash segment.
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Market Positioning and Directional Bets
The surge in open interest amid a price decline suggests that market participants may be positioning for increased volatility or a potential downward move. The 17.07% rise in OI, coupled with a futures volume of over 21,000 contracts, points to active trading strategies, possibly including protective puts or short futures positions.
Given Havells India’s mojo score of 44.0 and a recent downgrade from Hold to Sell on 20 Jan 2026, the derivatives market appears to be reflecting a more cautious or bearish sentiment. The market cap grade of 2 and mid-cap status further imply that the stock is susceptible to sharper swings, attracting speculative interest in the derivatives segment.
However, the stock’s position above the 20-day and 50-day moving averages indicates that some longer-term investors may still view the stock as holding value, potentially leading to a tug-of-war between bulls and bears in the near term.
Liquidity and Trading Considerations
Liquidity remains adequate for sizeable trades, with the stock’s traded value supporting a trade size of approximately ₹1.38 crores based on 2% of the 5-day average traded value. This level of liquidity ensures that institutional and retail traders can execute positions without significant market impact, which is crucial for derivatives trading strategies.
Nevertheless, the falling delivery volume signals a decline in genuine investor interest in the underlying shares, which could translate into increased volatility as derivatives traders dominate price discovery.
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Outlook and Investor Implications
Havells India’s recent open interest surge amid a price correction and downgrade in mojo rating suggests a cautious outlook from market participants. The derivatives market activity indicates that traders are either hedging existing positions or speculating on further downside, reflecting uncertainty in the stock’s near-term trajectory.
Investors should closely monitor the stock’s ability to hold above key moving averages and watch for changes in delivery volumes as indicators of genuine investor conviction. The mixed technical signals and falling investor participation caution against aggressive long positions at this stage.
Given the mid-cap nature of Havells India and its current mojo grade of Sell, investors may consider exploring alternative opportunities within the electronics and appliances sector or broader market, especially those with stronger fundamental and technical profiles.
Summary
In summary, Havells India Ltd. has experienced a notable 17.07% increase in open interest in its derivatives segment, signalling heightened market activity amid a price decline and a downgrade in mojo rating. The mixed technical indicators and falling delivery volumes suggest a cautious market stance, with traders possibly positioning for increased volatility or a bearish move. Adequate liquidity supports active trading, but investors should remain vigilant and consider alternative options within the sector.
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