National Aluminium Company Ltd Sees Sharp Open Interest Surge Signalling Strong Market Positioning

Open Interest and Volume Dynamics

On 6 January 2026, NATIONALUM’s open interest (OI) in futures and options contracts rose sharply by 4,926 contracts, a 16.11% increase from the previous day’s 30,577 to 35,503. This notable expansion in OI was accompanied by a total volume of 48,881 contracts, reflecting active participation from both institutional and retail traders. The futures segment alone accounted for a value of approximately ₹55,802.68 lakhs, while the options segment’s notional value was substantially higher at ₹59,163.08 crores, underscoring the stock’s prominence in derivatives trading.

The combined derivatives turnover stood at ₹70,487.90 lakhs, indicating strong liquidity and investor interest. This surge in open interest, coupled with elevated volumes, typically points to fresh positions being initiated rather than existing ones being squared off, suggesting a directional bias emerging in the market.

Price Action and Technical Strength

National Aluminium’s underlying share price has been on an impressive run, hitting a new 52-week high of ₹349.30 on the day of the report. The stock outperformed its sector by 1.55%, with a daily gain of 5.03%, and has recorded a consecutive four-day rally, delivering a cumulative return of 10.88% over this period. Intraday trading saw the stock touch a high of ₹349.30, representing a 5.59% increase from the previous close.

Technical indicators reinforce the bullish momentum, with the stock trading above its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages. This alignment of moving averages is a classic sign of sustained upward momentum, often attracting momentum-driven traders and long-term investors alike.

Interestingly, the weighted average price for the day showed more volume traded closer to the lower price range, which may indicate cautious accumulation by buyers at slightly discounted levels during intraday dips.

Sector and Market Context

The Aluminium & Aluminium Products sector has gained 4.15% on the day, with NATIONALUM outperforming the sector benchmark. In contrast, the broader Sensex index declined marginally by 0.14%, highlighting the stock’s relative strength amid a mixed market environment. This sectoral outperformance is supported by favourable demand-supply dynamics and improving global aluminium prices, which have buoyed investor sentiment.

Despite the strong price gains, investor participation in terms of delivery volumes has shown a slight decline. Delivery volume on 5 January was 57.39 lakh shares, down 13.26% against the five-day average delivery volume. This suggests that while short-term trading activity is robust, longer-term holding interest may be moderating slightly, a factor investors should monitor closely.

Dividend Yield and Market Capitalisation

National Aluminium offers a healthy dividend yield of 3.17% at the current price level, which adds to its appeal for income-focused investors. The company is classified as a mid-cap with a market capitalisation of ₹63,052 crore, and its liquidity profile supports sizeable trade sizes, with the stock able to handle trades worth approximately ₹10.46 crore based on 2% of the five-day average traded value.

Market Positioning and Investor Sentiment

The sharp increase in open interest alongside rising prices suggests that market participants are positioning for further upside in NATIONALUM. The 16.11% jump in OI is significant in the context of the stock’s recent price appreciation and sectoral tailwinds. Such a pattern often indicates fresh long positions being established rather than short covering, implying bullish sentiment among traders.

Moreover, the stock’s Mojo Score has improved to 85.0, earning a Strong Buy grade as of 11 November 2025, upgraded from a Buy rating. This upgrade reflects enhanced fundamentals, positive earnings outlook, and technical strength, reinforcing the stock’s attractiveness for investors seeking growth in the non-ferrous metals space.

Given the stock’s mid-cap status and a market cap grade of 2, it remains accessible to a broad range of investors while offering growth potential. The combination of strong derivatives activity, price momentum, and fundamental upgrades positions NATIONALUM as a compelling candidate for inclusion in diversified portfolios.

Potential Directional Bets and Risks

With open interest rising sharply, traders are likely placing directional bets anticipating continued price appreciation. The derivatives market activity suggests a bullish consensus, possibly driven by expectations of sustained aluminium demand, favourable export conditions, and stable input costs.

However, investors should remain cautious of potential volatility. The recent decline in delivery volumes hints at some profit booking or reduced conviction among long-term holders. Additionally, global commodity price fluctuations and geopolitical factors could impact aluminium prices and, by extension, NATIONALUM’s performance.

Risk management strategies, including monitoring open interest changes and volume patterns, will be crucial for investors navigating this dynamic environment.

Outlook and Conclusion

National Aluminium Company Ltd’s recent surge in open interest and volume in the derivatives market, coupled with strong price performance and a technical upgrade to a Strong Buy rating, signals robust investor confidence. The stock’s ability to outperform its sector and the broader market amid positive fundamentals and liquidity support makes it a noteworthy contender for investors seeking exposure to the non-ferrous metals industry.

While the bullish momentum is clear, investors should remain vigilant to shifts in delivery volumes and broader market conditions that could influence price trajectories. Overall, NATIONALUM’s current market positioning and derivatives activity suggest a constructive outlook with potential for further gains, provided sectoral and macroeconomic factors remain favourable.

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