Kalyan Jewellers Sees Sharp Open Interest Surge Amid Prolonged Downtrend

Open Interest and Volume Dynamics

The latest data reveals that open interest (OI) in Kalyan Jewellers’ futures and options contracts rose from 51,197 to 58,727 contracts, an increase of 7,530 contracts or 14.71% on 21 Jan 2026. This rise in OI was accompanied by a futures volume of 47,905 contracts, indicating active participation in the derivatives market. The total futures value stood at approximately ₹31,299 lakhs, while the options segment exhibited a staggering notional value of over ₹22,090 crores, underscoring the scale of trading activity.

Despite this surge in derivatives activity, the underlying stock price has been under pressure, closing at ₹424, down 5.56% on the day and touching an intraday low of ₹429.2. The weighted average price of traded volumes skewed towards the lower end of the day’s range, suggesting selling dominance. Notably, Kalyan Jewellers is trading below all key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – reinforcing the bearish technical backdrop.

Market Positioning and Sentiment

The simultaneous rise in open interest and falling prices typically indicates that fresh short positions are being established, or that existing shorts are being added to, reflecting bearish sentiment among derivatives traders. This is consistent with the stock’s underperformance relative to its sector, which gained 0.49% on the same day, and the broader Sensex, which declined marginally by 0.16%.

Investor participation in the cash segment appears to be waning, with delivery volumes dropping 30.07% against the five-day average, signalling reduced conviction among long-term holders. The stock’s liquidity remains adequate for sizeable trades, with a 2% threshold of the five-day average traded value allowing for transactions up to ₹5.72 crores without significant market impact.

Fundamental and Technical Assessment

Kalyan Jewellers India Ltd, a mid-cap player with a market capitalisation of approximately ₹46,780 crores, operates within the Gems, Jewellery and Watches industry. The company’s current Mojo Score stands at 44.0, reflecting a Sell rating, a downgrade from its previous Hold grade as of 19 Jan 2026. This downgrade aligns with the deteriorating price momentum and weakening investor sentiment.

The stock’s consistent underperformance, losing 17.37% over the past nine trading sessions, highlights sustained selling pressure. The technical indicators, including the stock trading below all major moving averages, suggest that the downtrend is firmly entrenched. The falling delivery volumes further indicate that long-term investors are either exiting or refraining from fresh accumulation, compounding bearish outlooks.

Derivatives Market Insights and Potential Directional Bets

The sharp increase in open interest amid declining prices points to a build-up of short positions or protective put buying in the derivatives market. Traders may be positioning for further downside or hedging existing long exposures. The substantial notional value in options contracts suggests active strategies involving puts and calls, possibly reflecting volatility expectations or directional bets on continued weakness.

Given the sector’s relative strength compared to Kalyan Jewellers’ stock, the divergence may attract contrarian interest; however, the current technical and fundamental signals caution against aggressive long positions. The market appears to be pricing in near-term challenges, possibly linked to sector-specific headwinds or company-specific concerns.

Implications for Investors

For investors and traders, the current scenario presents a cautionary tale. The rising open interest amid falling prices typically signals that bearish bets are being reinforced, increasing the risk of further downside. The stock’s technical weakness and declining delivery volumes suggest limited support from long-term holders.

Market participants should closely monitor upcoming earnings, sector developments, and broader economic indicators that could influence sentiment. Given the mid-cap status and moderate liquidity, sudden volatility spikes are possible, especially in the derivatives segment where large positions can amplify price moves.

In summary, Kalyan Jewellers India Ltd is currently navigating a challenging phase marked by deteriorating fundamentals, technical weakness, and heightened derivatives activity signalling bearish positioning. Investors are advised to exercise prudence and consider alternative opportunities within the sector or broader market.

Summary of Key Metrics:

• Open Interest: 58,727 contracts (+14.7%)


• Futures Volume: 47,905 contracts


• Futures Value: ₹31,299 lakhs


• Options Notional Value: ₹22,090 crores


• Stock Price: ₹424 (down 5.56% on 21 Jan 2026)


• Mojo Score: 44.0 (Sell, downgraded from Hold)


• Market Cap: ₹46,780 crores (Mid Cap)


• Delivery Volume: 14.32 lakhs (-30.07% vs 5-day average)

Outlook

Until a clear reversal in price action and open interest trends emerges, the prevailing market positioning suggests continued caution. Investors should weigh the risks carefully and monitor derivative market signals as a barometer of sentiment shifts.

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