Open Interest and Volume Dynamics
The latest data reveals that Hindustan Petroleum's open interest (OI) in derivatives rose from 28,698 contracts to 32,726, an increase of 4,028 contracts or 14.04%. This substantial rise in OI is accompanied by a daily volume of 20,562 contracts, indicating robust trading activity. The futures value stands at ₹95,172.34 lakhs, while the options value is significantly higher at ₹10,373.92 crores, culminating in a total derivatives value of approximately ₹96,206.31 lakhs.
This surge in open interest, combined with elevated volumes, typically signals fresh capital inflows and heightened market interest. It suggests that traders are either initiating new positions or adding to existing ones, potentially anticipating directional moves in the underlying stock.
Price and Technical Context
Hindustan Petroleum's underlying share price closed at ₹471, just 4.78% shy of its 52-week high of ₹494.45. The stock has outperformed its sector by 1.38% today and reversed a three-day losing streak, signalling a positive shift in momentum. Notably, the stock is trading above all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — which is a strong technical endorsement of its upward trend.
However, investor participation in the cash segment appears to be waning, with delivery volumes on 26 Dec falling by 69.06% compared to the five-day average, registering 3.82 lakh shares. This divergence between derivatives activity and cash market participation could indicate that speculative interest is driving the recent momentum rather than broad-based investor conviction.
Market Positioning and Directional Bets
The increase in open interest alongside rising prices typically points to fresh long positions being established, reflecting bullish sentiment. Given the stock's proximity to its 52-week high and its outperformance relative to the oil sector and Sensex, market participants appear to be positioning for further upside.
Hindustan Petroleum's current Mojo Score of 78.0 and a Mojo Grade of Buy, upgraded from a Strong Buy on 22 Dec 2025, further corroborate this positive outlook. The upgrade reflects an improved assessment of the company's fundamentals and technicals, signalling confidence in its near-term prospects.
Despite the upgrade, the market cap grade remains modest at 2, consistent with its mid-cap status and a market capitalisation of ₹1,00,326.83 crores. This suggests that while the stock is gaining favour, it still carries some risk relative to larger, more stable oil sector peers.
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Dividend Yield and Liquidity Considerations
Hindustan Petroleum offers a relatively attractive dividend yield of 3.31% at the current price level, which may appeal to income-focused investors amid the ongoing market volatility. The stock's liquidity is adequate for sizeable trades, with a 2% threshold of the five-day average traded value supporting trade sizes up to ₹2.07 crores. This liquidity profile ensures that institutional investors can enter or exit positions without significant price impact.
Sector and Benchmark Comparison
On the day in question, Hindustan Petroleum delivered a 0.81% return, outperforming the oil sector's decline of 0.48% and the Sensex's fall of 0.41%. This relative strength underscores the stock's resilience and growing investor preference within the oil space. The sector's mixed performance, coupled with Hindustan Petroleum's positive momentum, may attract rotation from weaker oil stocks into this mid-cap player.
Implications for Investors
The combination of rising open interest, improving price action, and a recent upgrade in Mojo Grade suggests that Hindustan Petroleum is attracting renewed interest from both derivatives traders and fundamental investors. The derivatives market activity indicates that participants are positioning for a potential continuation of the uptrend, possibly anticipating favourable developments in crude oil prices or company-specific catalysts.
However, the decline in delivery volumes signals caution, as it may reflect a lack of conviction among long-term holders. Investors should monitor whether this divergence resolves in favour of sustained buying in the cash market to confirm the durability of the rally.
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Outlook and Conclusion
Hindustan Petroleum Corporation Ltd. is currently exhibiting signs of renewed bullishness, supported by a significant surge in open interest and strong technical positioning. The upgrade from Strong Buy to Buy by MarketsMOJO on 22 Dec 2025 reflects a tempered but positive outlook, balancing the stock’s recent gains with cautious optimism.
Investors should watch for confirmation of sustained buying interest in the cash market to validate the derivatives-driven momentum. Given the stock’s proximity to its 52-week high and its outperformance relative to sector peers, it remains a compelling candidate for investors seeking exposure to the oil sector’s recovery.
Overall, the data suggests that market participants are increasingly confident in Hindustan Petroleum’s near-term prospects, with derivatives activity signalling directional bets favouring further upside potential.
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