Polycab India Ltd Sees Significant Open Interest Surge Amid Market Outperformance

Open Interest and Volume Dynamics

On 22 Jan 2026, Polycab India Ltd's open interest (OI) in derivatives rose sharply to 70,228 contracts, up from 62,098 the previous day, marking an increase of 8,130 contracts or 13.09%. This expansion in OI was accompanied by a robust volume of 58,563 contracts traded, indicating active participation from traders and investors. The futures segment alone accounted for a value of approximately ₹1,82,639 lakhs, while the options segment's value stood at an extraordinary ₹34,120 crores, underscoring the significant derivatives interest in the stock.

The total derivatives value traded was ₹1,85,110 lakhs, reflecting strong liquidity and market engagement. The underlying stock price closed at ₹7,017, showing resilience despite a recent two-day dip. This combination of rising OI and sustained volume suggests that market participants are positioning themselves for potential price movements, possibly anticipating a directional shift.

Price Performance and Technical Context

Polycab India Ltd outperformed its sector by 1.28% on the day, registering a 0.65% gain compared to the sector's decline of 0.59%. The Sensex also rose by 0.48%, indicating a broadly positive market environment. Notably, the stock reversed its downward trend after two consecutive days of losses, signalling a potential recovery phase.

From a technical standpoint, the stock's price remains above its 200-day moving average, a long-term bullish indicator. However, it trades below its 5-day, 20-day, 50-day, and 100-day moving averages, suggesting short- to medium-term consolidation or resistance. This mixed technical picture may be prompting traders to take fresh positions in derivatives, anticipating a breakout or further consolidation.

Investor Participation and Liquidity Considerations

Despite the positive price action, investor participation in terms of delivery volume has declined. On 21 Jan 2026, delivery volume was 3.43 lakh shares, down 46.72% from the five-day average, indicating reduced long-term holding interest. This divergence between price gains and falling delivery volumes often points to speculative trading rather than sustained accumulation.

Liquidity remains adequate for sizeable trades, with the stock's average traded value supporting trade sizes up to ₹17.36 crores based on 2% of the five-day average traded value. This liquidity profile facilitates active derivatives trading and allows institutional players to enter or exit positions without significant price impact.

Market Positioning and Directional Bets

The surge in open interest alongside strong volume suggests that traders are actively positioning for a directional move in Polycab India Ltd. Given the stock's recent price recovery and technical setup, market participants may be anticipating a bullish breakout. The increase in OI by over 8,000 contracts indicates fresh long positions or the addition to existing ones, reflecting confidence in upward momentum.

However, the decline in delivery volumes tempers this optimism, hinting that the rally may be driven more by short-term traders and derivatives players rather than long-term investors. This dynamic often leads to increased volatility, as speculative positions can unwind quickly if market sentiment shifts.

Fundamental and Market Context

Polycab India Ltd operates in the Cables - Electricals industry, a sector that has shown resilience amid fluctuating economic conditions. The company holds a mid-cap market capitalisation of approximately ₹1,05,692 crores, reflecting substantial scale and investor interest. Its Mojo Score of 72.0 and upgraded Mojo Grade to 'Buy' from 'Hold' as of 21 Jul 2025 further reinforce its favourable outlook.

The stock's market cap grade stands at 2, indicating moderate size relative to peers, which may attract both institutional and retail investors seeking growth opportunities in the electrical cables segment. The recent upgrade in rating by MarketsMOJO highlights improving fundamentals and technical strength, encouraging increased market participation.

Implications for Investors and Traders

The current open interest surge in Polycab India Ltd's derivatives market signals a pivotal moment for investors and traders. The combination of a positive price trend reversal, strong derivatives activity, and an upgraded buy rating suggests potential upside in the near term. However, the contrasting decline in delivery volumes advises caution, as speculative trading could lead to heightened volatility.

Investors should monitor the stock's ability to sustain gains above key moving averages, particularly the 5-day and 20-day averages, which currently act as resistance levels. A decisive break above these could confirm a bullish trend continuation, supported by the strong derivatives positioning.

Traders engaged in options and futures should also watch for changes in implied volatility and open interest in specific strike prices, which may reveal more nuanced directional bets. The substantial options value traded indicates active hedging and speculative strategies, which could influence price swings.

Conclusion

Polycab India Ltd's recent open interest surge in derivatives, coupled with outperformance relative to its sector and the Sensex, highlights growing market interest and evolving positioning. The upgraded Mojo Grade to 'Buy' and a solid Mojo Score of 72.0 underpin a positive fundamental and technical outlook. While speculative activity is evident, the stock's liquidity and market cap profile support sustained trading interest.

Investors and traders should remain vigilant to price action and volume patterns in the coming sessions to capitalise on potential directional moves while managing risk amid possible volatility.

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