Hindustan Petroleum Sees Sharp Open Interest Surge Amid Weak Price Momentum

Open Interest and Volume Dynamics

On 22 January 2026, Hindustan Petroleum’s open interest (OI) in derivatives climbed sharply to 41,896 contracts from 36,610 the previous day, marking an increase of 5,286 contracts or 14.44%. This rise in OI was accompanied by a futures volume of 29,798 contracts, reflecting robust trading activity. The futures value stood at approximately ₹1,03,122 lakhs, while the options segment exhibited an enormous notional value of ₹15,956 crore, underscoring the scale of derivatives interest in the stock.

Despite this surge in derivatives activity, the underlying stock price has been under pressure. HPCL’s share price declined by 2.69% on the day, closing near its intraday low of ₹416.1. The stock has been on a downward trajectory for five consecutive sessions, cumulatively losing 9.1% in value over this period. This divergence between rising open interest and falling prices often indicates that fresh positions are being built, potentially signalling directional bets by market participants.

Price Performance and Technical Context

Hindustan Petroleum’s current price of ₹416 is trading below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — reflecting a bearish technical setup. The stock underperformed its sector by 1.51% and the broader Sensex by 1.78% on the day, highlighting relative weakness within the oil sector. Additionally, delivery volumes have contracted sharply, with a 36.2% decline in delivery volume to 21.95 lakh shares compared to the five-day average, signalling reduced investor participation in the cash market.

Despite the bearish price action, Hindustan Petroleum offers a relatively attractive dividend yield of 3.62%, which may provide some cushion for long-term investors amid volatility. The stock’s market capitalisation stands at ₹88,634.45 crore, categorising it as a mid-cap within the oil industry.

Market Positioning and Potential Directional Bets

The sharp increase in open interest amid falling prices suggests that traders are actively repositioning themselves in the derivatives market. Typically, rising OI alongside declining prices can indicate that fresh short positions are being established, or alternatively, that long positions are being added in anticipation of a rebound. The substantial notional value in options contracts further points to complex strategies, possibly involving hedging or volatility plays.

Given the stock’s underperformance relative to its sector and the broader market, some investors may be betting on continued downside momentum. However, the high dividend yield and mid-cap status could attract value-oriented investors looking for a turnaround opportunity. The liquidity profile supports sizeable trades, with the stock’s average traded value allowing for transactions up to ₹4.78 crore without significant market impact.

Mojo Score and Analyst Ratings

Hindustan Petroleum currently holds a Mojo Score of 64.0, reflecting a moderate outlook. The Mojo Grade was downgraded from Buy to Hold on 22 January 2026, signalling a cautious stance by analysts amid the recent price weakness and uncertain market conditions. The company’s market cap grade is 2, indicating mid-cap status with moderate liquidity and market presence.

This downgrade aligns with the technical and volume indicators, suggesting that investors should monitor the stock closely for confirmation of trend direction before committing fresh capital.

Sector and Broader Market Context

The oil sector has faced headwinds recently due to fluctuating crude prices and geopolitical uncertainties. Hindustan Petroleum’s underperformance relative to its sector peers and the Sensex reflects these challenges. The stock’s technical weakness, combined with falling investor participation in the cash segment, suggests that market participants are cautious about near-term prospects.

However, the derivatives market activity indicates that traders are actively positioning for potential volatility or directional moves. This divergence between cash and derivatives markets is not uncommon in periods of uncertainty, as sophisticated investors use options and futures to hedge or speculate on price movements.

Outlook and Investor Considerations

Investors should weigh the recent surge in open interest against the backdrop of declining prices and reduced delivery volumes. The current Hold rating and Mojo Score of 64.0 suggest a neutral stance, with neither strong bullish nor bearish conviction prevailing.

Those considering exposure to Hindustan Petroleum may want to monitor key technical levels and derivatives positioning closely. A sustained break below the 200-day moving average could signal further downside, while a rebound accompanied by rising volumes might indicate a recovery phase. The stock’s attractive dividend yield remains a positive factor for income-focused investors.

Overall, the market’s mixed signals warrant a cautious approach, with attention to evolving open interest trends and sector developments critical for informed decision-making.

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