Steel Authority Of India Ltd Sees Sharp Open Interest Surge Signalling Bullish Market Positioning

Open Interest and Volume Dynamics

On 22 Jan 2026, SAIL’s open interest (OI) in derivatives jumped to 68,578 contracts from the previous 53,056, marking a robust increase of 29.26%. This substantial rise in OI indicates fresh positions being established rather than existing ones being squared off, reflecting heightened trader interest. The volume for the day stood at 71,834 contracts, closely aligned with the open interest, underscoring active participation in the futures and options market.

The futures value traded was approximately ₹3,12,511 lakhs, while the options segment saw an even larger notional value of ₹20,136.92 crores, culminating in a total derivatives turnover of ₹3,15,924.47 lakhs. Such elevated activity levels highlight the growing focus on SAIL within the derivatives space, often a precursor to notable price movements.

Price Performance and Technical Indicators

SAIL’s underlying stock price has been on an upward trajectory, hitting a new 52-week high of ₹153.9 during intraday trading, representing a 5.09% gain on the day. The stock outperformed its ferrous metals sector peers by 1.17%, delivering a 2.56% return compared to the sector’s 1.49% and the Sensex’s modest 0.19% gains. This outperformance is supported by the stock trading above all key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – signalling sustained bullish momentum.

Investor participation has also risen, with delivery volumes reaching 79.78 lakh shares on 21 Jan, a 12.13% increase over the five-day average. This suggests that long-term investors are accumulating shares, reinforcing the positive technical outlook.

Market Positioning and Sentiment

The sharp increase in open interest alongside rising prices and volumes suggests that market participants are positioning for further upside in SAIL. The 29.26% jump in OI is indicative of fresh long positions being built, possibly reflecting bullish bets on the stock’s near-term prospects. This is further supported by the stock’s Mojo Score of 65.0 and an upgraded Mojo Grade from Sell to Hold as of 23 Dec 2025, signalling improving fundamentals and technical strength.

Despite the upgrade, the stock retains a Market Cap Grade of 2, categorising it as a mid-cap entity with moderate liquidity and market presence. The stock’s liquidity profile remains adequate, with the ability to handle trade sizes of approximately ₹5.96 crores based on 2% of the five-day average traded value, making it accessible for institutional and retail investors alike.

Sectoral Context and Comparative Analysis

Within the ferrous metals sector, SAIL’s recent performance stands out. The sector has been experiencing mixed trends amid fluctuating global steel demand and raw material cost pressures. SAIL’s ability to outperform the sector by 1.17% on the day and maintain gains over two consecutive sessions, delivering a 3.26% return in that period, highlights its relative strength.

Investors should note that the stock’s upward momentum is supported by both technical and fundamental factors, including steady delivery volumes and positive market sentiment. However, the mid-cap status and moderate market cap grade suggest that volatility could persist, necessitating cautious position sizing.

Implications for Investors and Traders

The surge in open interest combined with rising prices and volumes suggests that traders are increasingly confident in SAIL’s near-term upside potential. This could be driven by expectations of improved steel demand, better operational efficiencies, or favourable government policies supporting the ferrous metals sector.

For investors, the upgraded Mojo Grade to Hold from Sell indicates a shift towards a more neutral-to-positive stance, reflecting improved fundamentals and technical signals. However, the stock’s mid-cap nature and moderate market cap grade imply that investors should monitor liquidity and volatility closely.

Traders might consider the current derivatives activity as a signal to explore directional strategies, such as long futures or call options, to capitalise on anticipated price appreciation. Nonetheless, prudent risk management remains essential given the inherent cyclicality of the steel industry and potential external headwinds.

Outlook and Conclusion

Steel Authority Of India Ltd. is currently exhibiting strong signs of bullish momentum, underpinned by a notable increase in open interest and robust price action. The stock’s ability to outperform its sector and maintain gains over consecutive sessions suggests sustained investor interest and positive market positioning.

While the upgraded Mojo Grade to Hold reflects improving fundamentals, investors should remain vigilant of sectoral dynamics and broader economic factors that could influence steel demand and pricing. The current derivatives market activity provides valuable insights into market sentiment, signalling potential directional bets favouring further upside.

Overall, SAIL’s recent market behaviour positions it as a stock to watch closely within the ferrous metals space, offering opportunities for both investors and traders seeking exposure to India’s steel sector growth story.

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