Jindal Steel Ltd Sees Significant Open Interest Surge Amid Bullish Momentum

Open Interest and Volume Dynamics

On 4 February 2026, Jindal Steel’s open interest (OI) in futures and options contracts rose sharply by 2,940 contracts, a 10.28% increase from the previous day’s 28,594 to 31,534. This rise in OI was accompanied by a futures volume of 22,205 contracts, indicating active trading interest. The total futures value stood at approximately ₹29,774 lakhs, while the options segment exhibited an enormous notional value of ₹13,600.5 crores, underscoring the stock’s prominence in the derivatives market.

The underlying stock price has been on an upward trajectory, trading above all key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – which typically signals sustained bullish momentum. The stock outperformed its sector by 0.39% on the day, gaining 1.45%, and has recorded a 6.15% return over the past three consecutive trading sessions.

Market Positioning and Investor Behaviour

The surge in open interest alongside rising prices suggests fresh long positions being established rather than short covering. This is a classic hallmark of bullish market sentiment, where traders anticipate further upside potential. However, it is noteworthy that delivery volumes have declined sharply by 49.41% compared to the 5-day average, indicating that while speculative activity in derivatives is intensifying, actual investor participation in the cash segment is moderating.

Liquidity remains adequate, with the stock’s traded value supporting sizeable trade sizes of up to ₹5.55 crores based on 2% of the 5-day average traded value. This liquidity profile favours institutional participation and large trades without significant price impact.

Technical and Fundamental Context

Jindal Steel Ltd. is a large-cap player in the ferrous metals industry with a market capitalisation of ₹1,18,963 crores. The company’s Mojo Score currently stands at 58.0, reflecting a Hold rating, an upgrade from a Sell rating issued on 11 November 2025. This improvement in the Mojo Grade suggests a stabilisation in fundamentals and technical outlook, although the stock is yet to reach a strong buy status.

The stock’s recent price action, including a new 52-week high of Rs 1180.5 and consistent gains over three sessions, aligns with the positive shift in market sentiment. The sector itself has been relatively buoyant, with the ferrous metals index outperforming broader benchmarks such as the Sensex, which gained a modest 0.32% on the same day.

Implications of Open Interest Surge

The 10.28% increase in open interest is significant in the context of the stock’s price appreciation. Rising OI concurrent with price gains typically indicates that new money is flowing into the market, with traders taking fresh long positions rather than merely closing shorts. This can be interpreted as a vote of confidence in the stock’s near-term prospects.

However, the sharp decline in delivery volumes suggests that long-term investors may be cautious or consolidating positions, while short-term traders and speculators dominate the current market activity. This divergence between derivatives and cash market participation warrants close monitoring, as it may signal increased volatility or a potential correction if speculative enthusiasm wanes.

Sector and Market Comparison

Jindal Steel’s outperformance relative to its sector by 0.39% and the Sensex by over 1% on the day highlights its relative strength. The ferrous metals sector is sensitive to global commodity prices, infrastructure demand, and domestic industrial activity. Positive cues from these factors likely underpin the bullish positioning observed in the derivatives market.

Moreover, the stock’s ability to sustain trading above all major moving averages reinforces the technical case for further upside, provided macroeconomic conditions remain favourable.

Investor Takeaways and Outlook

For investors and traders, the current surge in open interest combined with positive price momentum in Jindal Steel Ltd. suggests a tactical opportunity to participate in the stock’s upward trend. The derivatives market activity indicates that market participants are positioning for further gains, supported by strong technical indicators and improving fundamental sentiment.

Nevertheless, the decline in delivery volumes signals a need for caution, as it may reflect reduced conviction among long-term holders. Investors should monitor upcoming quarterly results, global steel demand trends, and commodity price movements closely to gauge sustainability of the rally.

Given the Hold rating and Mojo Score of 58.0, a balanced approach is advisable, with selective accumulation for those with a medium-term horizon and risk appetite. The stock’s liquidity profile supports sizeable trades, making it accessible for institutional investors seeking exposure to the ferrous metals sector.

Conclusion

Jindal Steel Ltd.’s recent open interest surge in derivatives, coupled with a new 52-week high and sustained price gains, underscores growing bullish sentiment in the stock. While speculative activity is intensifying, the divergence with delivery volumes suggests a nuanced market positioning that warrants careful analysis. Investors should weigh the positive technical signals against fundamental factors and sector dynamics before making allocation decisions.

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