Open Interest and Volume Dynamics
On 24 Feb 2026, SAIL's open interest (OI) in derivatives rose sharply by 15,651 contracts, a 31.35% increase from the previous day's 49,924 to 65,575. This notable expansion in OI was accompanied by a futures volume of 41,638 contracts, reflecting robust trading activity. The futures value stood at approximately ₹2,73,183.46 lakhs, while the options segment exhibited an even larger notional value of ₹3,55,776.68 lakhs, underscoring the stock's prominence in the derivatives market.
The total combined value of futures and options contracts reached ₹2,73,424.22 lakhs, indicating substantial liquidity and investor interest. The underlying stock price was ₹153, having experienced a 1-day decline of 2.19%, underperforming the Ferrous Metals sector's marginal fall of 0.13% and the broader Sensex's 1.35% drop.
Price Performance and Technical Context
SAIL has been on a downward trajectory for the past two consecutive days, losing 4.2% cumulatively. The stock touched an intraday low of ₹152.05 on 24 Feb, marking a 2.96% decline from the previous close. Despite this short-term weakness, the share price remains above its 50-day, 100-day, and 200-day moving averages, signalling that the medium- to long-term trend retains some underlying strength. However, it currently trades below its 5-day and 20-day moving averages, reflecting recent selling pressure and potential short-term bearishness.
Investor participation has notably increased, with delivery volumes on 23 Feb rising by 50.37% to 75.06 lakh shares compared to the 5-day average. This surge in delivery volume suggests that more investors are holding shares rather than trading intraday, which could indicate accumulation or repositioning ahead of anticipated market moves.
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Market Positioning and Directional Bets
The sharp rise in open interest alongside increased volume points to fresh positions being established rather than existing ones being squared off. This typically indicates that traders are placing directional bets, expecting significant price movement in the near term. Given the recent price weakness, the surge in OI could reflect increased put buying as a hedge or speculative short positions anticipating further downside.
However, the sustained price level above key moving averages and rising delivery volumes suggest that some investors may be accumulating shares, expecting a rebound or longer-term recovery. This dichotomy between short-term bearish sentiment and medium-term bullish positioning highlights the complex market dynamics surrounding SAIL.
From a technical perspective, the stock's failure to hold above the 5-day and 20-day moving averages could invite further selling pressure if these levels are not reclaimed soon. Conversely, a bounce from the 50-day moving average support zone could attract fresh buying interest, potentially triggering a reversal.
Mojo Score and Analyst Ratings
MarketsMOJO assigns SAIL a Mojo Score of 65.0, categorising it with a Hold rating. This represents an upgrade from a previous Sell rating dated 23 Dec 2025, reflecting improved fundamentals and technical outlook. The market capitalisation grade stands at 2, indicating mid-cap status with moderate liquidity and institutional interest.
Despite the recent price underperformance, the upgrade signals cautious optimism among analysts, who acknowledge the stock's potential for recovery amid volatile market conditions. Investors should weigh these factors carefully, considering both the risks of further downside and the opportunities presented by the current valuation and market positioning.
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Liquidity and Trading Considerations
SAIL's liquidity profile remains adequate for sizeable trades, with the stock's average traded value supporting a trade size of approximately ₹4.86 crore based on 2% of the 5-day average traded value. This level of liquidity is favourable for institutional investors and active traders seeking to enter or exit positions without significant market impact.
Given the recent volatility and open interest surge, traders should monitor key technical levels closely, including the 5-day and 20-day moving averages as resistance, and the 50-day moving average as support. The interplay between these levels will likely dictate near-term price direction and the sustainability of current market positioning.
Outlook and Strategic Implications
The sudden increase in open interest in SAIL's derivatives market signals a pivotal moment for the stock, with market participants positioning for potential directional moves. While short-term price weakness and underperformance relative to the sector raise caution, the improved Mojo Grade and rising delivery volumes suggest underlying investor confidence.
Investors should consider the broader macroeconomic environment impacting the ferrous metals sector, including raw material costs, demand from infrastructure and manufacturing, and global commodity price trends. These factors will influence SAIL's operational performance and, by extension, its market valuation and derivatives activity.
In summary, the current market signals point to a nuanced scenario where both bullish and bearish forces are at play. Close monitoring of open interest trends, volume patterns, and price action will be essential for making informed investment decisions in Steel Authority Of India Ltd.
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