Steel Authority Of India Ltd Sees Sharp Open Interest Surge Amid Bullish Momentum

Open Interest and Volume Dynamics

On 29 December 2025, SAIL’s open interest (OI) in derivatives rose sharply by 7,476 contracts, an 11.89% increase from the previous day’s 62,897 to 70,373. This substantial rise in OI indicates fresh positions being established rather than existing ones being squared off, reflecting heightened interest from traders and investors in the stock’s near-term prospects.

Simultaneously, the volume of contracts traded stood at 49,533, underscoring active participation in the derivatives market. The futures value associated with these trades was approximately ₹1,49,464 lakhs, while the options segment exhibited an even larger notional value of ₹1,74,241 crores, highlighting the significant liquidity and interest in SAIL’s derivatives.

The combined total value of futures and options contracts reached ₹1,52,255 lakhs, reinforcing the stock’s prominence in the derivatives space. The underlying spot price closed at ₹137, reflecting a 2.87% gain on the day, further supporting the bullish sentiment.

Price Performance and Technical Indicators

SAIL has outperformed its ferrous metals sector by 2.37% on the day, while the sector itself gained a modest 0.28%. The benchmark Sensex declined by 0.15%, highlighting SAIL’s relative strength amid broader market weakness. The stock has recorded gains for three consecutive sessions, delivering a cumulative return of 4.3% over this period.

Intraday, SAIL touched a high of ₹138.65, marking a 3.4% rise from the previous close. Notably, the stock is trading above all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling a robust uptrend and positive technical momentum.

Investor participation has also surged, with delivery volume on 29 December reaching 1.37 crore shares, a remarkable 167.84% increase compared to the five-day average delivery volume. This spike in delivery volume suggests genuine accumulation by long-term investors rather than speculative trading alone.

Market Positioning and Sentiment Analysis

The surge in open interest alongside rising prices and volumes suggests that market participants are positioning for further upside in SAIL. The increase in OI by nearly 12% is significant in the context of the stock’s recent price appreciation and technical strength. This pattern typically indicates fresh long positions being built rather than short covering.

Moreover, the stock’s Mojo Score has improved to 58.0, with a Mojo Grade upgrade from Sell to Hold on 23 December 2025, reflecting a more favourable outlook from the MarketsMOJO analytics platform. Despite the upgrade, the grade remains cautious, signalling that while momentum is improving, investors should remain vigilant amid potential volatility in the ferrous metals sector.

SAIL’s market capitalisation stands at ₹55,638 crore, categorising it as a mid-cap stock with moderate liquidity. The stock’s liquidity profile supports sizeable trades, with the ability to handle trade sizes of approximately ₹5.4 crore based on 2% of the five-day average traded value, making it accessible for institutional investors and active traders alike.

Sectoral Context and Comparative Performance

The ferrous metals sector has been under pressure in recent months due to fluctuating raw material costs and global demand uncertainties. However, SAIL’s recent outperformance relative to its peers and the broader sector indicates company-specific strengths, possibly driven by operational efficiencies, favourable pricing, or positive earnings revisions.

Investors should note that while SAIL’s derivatives activity is robust, the overall sector remains volatile. The stock’s ability to sustain gains above key moving averages will be critical in confirming a sustained uptrend. Additionally, the delivery volume spike suggests that institutional investors may be accumulating shares, which could provide a foundation for further price appreciation.

Implications for Investors and Traders

The marked increase in open interest and volume in SAIL’s derivatives market signals that traders are actively positioning for a directional move, likely to the upside given the concurrent price gains and technical strength. This environment presents opportunities for both short-term traders and longer-term investors to capitalise on momentum.

However, investors should remain cautious of potential volatility, especially given the ferrous metals sector’s sensitivity to global economic factors and commodity price swings. Monitoring open interest trends alongside price action will be crucial to gauge whether the current bullish momentum can be sustained.

Given the recent Mojo Grade upgrade to Hold, investors might consider maintaining exposure while awaiting further confirmation of trend strength or additional fundamental catalysts. The stock’s liquidity and rising delivery volumes also support the case for continued investor interest.

Conclusion

Steel Authority Of India Ltd. is currently exhibiting strong signs of renewed investor interest, as evidenced by a significant surge in open interest and volume in its derivatives segment. The stock’s outperformance relative to its sector and the Sensex, combined with positive technical indicators and rising delivery volumes, suggests a constructive near-term outlook.

While the upgraded Mojo Grade to Hold reflects improving fundamentals and sentiment, investors should balance optimism with prudence given sectoral headwinds and market volatility. Continued monitoring of derivatives activity and price trends will be essential to assess the sustainability of this bullish momentum.

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