Open Interest Spike and Volume Analysis
On 21 January 2026, KEI Industries recorded an open interest (OI) of 20,954 contracts in its derivatives, marking a substantial increase of 5,937 contracts or 39.54% compared to the previous OI of 15,017. This surge in OI was accompanied by a robust trading volume of 81,271 contracts, indicating strong participation from traders and investors. The futures segment alone accounted for a value of approximately ₹96,986 lakhs, while the options segment's notional value was significantly higher at ₹4,609.05 crores, culminating in a total derivatives value exceeding ₹1,02,191 lakhs.
The underlying stock price closed at ₹3,895, having experienced a volatile session with an intraday price range marked by a low of ₹3,728.7, down 5.35% from the previous close. The weighted average price for the day was closer to the intraday low, suggesting that the bulk of trading activity occurred near the lower price levels. This price action, combined with the surge in open interest, points to a complex interplay of short-term bearish sentiment and potential accumulation by longer-term investors.
Price Performance and Moving Averages
KEI Industries has been under pressure recently, with the stock declining for five consecutive sessions, resulting in a cumulative loss of 10.81%. This underperformance is notable against the sector’s relatively modest decline of 0.14% and the Sensex’s positive return of 0.19% on the same day. The stock’s day change was -0.74%, further underscoring its laggard status within the cables and electricals sector.
From a technical perspective, KEI’s price remains above its 200-day moving average, a long-term bullish indicator, but below its 5-day, 20-day, 50-day, and 100-day moving averages. This positioning suggests that while the stock retains some underlying strength, short- to medium-term momentum has weakened considerably. The intraday volatility of 5.09% reflects heightened uncertainty and active repositioning by market participants.
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Investor Participation and Liquidity Considerations
Despite the surge in derivatives activity, delivery volumes have declined by 7.16% compared to the five-day average, with 1.51 lakh shares delivered on 21 January. This drop in delivery volume suggests that while speculative interest in derivatives has intensified, actual investor commitment to holding shares has softened. The stock remains sufficiently liquid, with a trade size capacity of approximately ₹2.92 crores based on 2% of the five-day average traded value, allowing for sizeable transactions without significant market impact.
Market Positioning and Directional Bets
The sharp increase in open interest alongside falling prices and high volatility indicates a mixed market stance. Some traders appear to be building short positions, anticipating further downside, while others may be accumulating long positions at lower levels, expecting a rebound. The divergence between futures and options values also suggests that market participants are employing a range of strategies, including hedging and directional bets.
KEI Industries’ current Mojo Score stands at 55.0 with a Mojo Grade of Hold, downgraded from Buy on 12 January 2026. This reflects a cautious stance by analysts, balancing the company’s mid-cap market capitalisation of ₹36,357 crores against recent price weakness and uncertain near-term outlook. The market cap grade of 2 further indicates moderate size and liquidity relative to peers in the cables and electricals sector.
Sector and Broader Market Context
The cables and electricals sector has experienced modest fluctuations recently, with KEI’s underperformance highlighting company-specific challenges or profit-taking. The broader market’s positive returns on the day contrast with KEI’s decline, suggesting that sector rotation or stock-specific factors are influencing investor behaviour. The elevated derivatives activity may be a precursor to a significant directional move, as traders position themselves ahead of upcoming corporate announcements or macroeconomic developments.
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Outlook and Investor Takeaways
Investors should closely monitor KEI Industries’ derivatives activity as a barometer of market sentiment. The substantial rise in open interest amid falling prices and high volatility suggests that the stock is at a critical juncture. While the Mojo Grade downgrade to Hold signals caution, the stock’s position above the 200-day moving average offers some technical support.
Market participants may consider the current environment as an opportunity to reassess their exposure, balancing the risks of continued short-term weakness against potential medium-term recovery. Given the mixed signals from volume, price action, and derivatives positioning, a prudent approach involving close tracking of open interest trends and price momentum is advisable.
KEI Industries remains a key player in the cables and electricals sector, and its evolving market dynamics warrant attention from both traders and long-term investors seeking to capitalise on sectoral growth while managing volatility risks.
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