Open Interest and Volume Dynamics
On 29 Dec 2025, SAIL’s open interest (OI) in derivatives rose sharply by 7,165 contracts, a 12.38% increase from the previous OI of 57,871 to 65,036. This substantial rise in OI indicates fresh positions being established rather than existing ones being squared off, reflecting heightened interest in the stock’s future price movement. The volume for the day stood at 63,791 contracts, closely aligned with the OI increase, reinforcing the notion of active trading and new market participants entering the fray.
The futures value traded was approximately ₹77,387 lakhs, while the options segment saw an enormous notional value of ₹34,404.67 crores, culminating in a total derivatives turnover of ₹83,977.89 lakhs. This level of activity underscores the stock’s liquidity and attractiveness for derivatives traders seeking to capitalise on anticipated price moves.
Price Performance and Technical Indicators
SAIL’s underlying price closed at ₹137, having touched an intraday high of ₹138.8, marking a 4.9% gain on the day. The stock has been on a two-day consecutive gain streak, delivering a cumulative return of 4.47%. Notably, it outperformed its Ferrous Metals sector by 2.59% and the Sensex by a significant margin, as the benchmark index declined marginally by 0.14% on the same day.
Technically, SAIL is trading above all key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – signalling a robust uptrend and positive momentum. This alignment of moving averages often attracts momentum traders and institutional investors, further supporting the bullish narrative.
Market Positioning and Investor Behaviour
Despite the strong price and volume action, delivery volumes have seen a contrasting trend. On 26 Dec 2025, delivery volume was recorded at 29.03 lakh shares, which is down by 47.83% compared to the five-day average delivery volume. This decline in delivery participation suggests that a significant portion of the recent activity is speculative or short-term in nature, with traders preferring to hold positions in derivatives rather than taking outright delivery of shares.
Liquidity remains adequate for sizeable trades, with the stock’s average traded value supporting trade sizes up to ₹3.99 crore based on 2% of the five-day average traded value. This liquidity profile is favourable for institutional players and large traders looking to build or unwind positions without significant market impact.
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Mojo Score Upgrade and Market Capitalisation Context
MarketsMOJO has upgraded SAIL’s Mojo Grade from Sell to Hold as of 23 Dec 2025, reflecting an improvement in the company’s fundamentals and market outlook. The current Mojo Score stands at 58.0, indicating a neutral to moderately positive stance. The stock’s market capitalisation is ₹56,939 crore, categorising it as a mid-cap entity within the Ferrous Metals sector.
The market cap grade of 2 suggests moderate size and liquidity, which aligns with the observed trading volumes and derivatives activity. This upgrade in rating may encourage cautious investors to reconsider their positions, especially given the recent price strength and technical signals.
Directional Bets and Potential Market Implications
The surge in open interest alongside rising prices and volumes points to a predominantly bullish positioning among derivatives traders. The increase in OI by over 12% suggests that participants are building fresh long positions or hedging existing exposure with a positive outlook on SAIL’s near-term price trajectory.
Given the stock’s outperformance relative to its sector and the broader market, it is plausible that traders are anticipating favourable developments in the ferrous metals industry or company-specific catalysts such as improved operational performance or government policy support. The technical strength further supports the likelihood of continued upward momentum, at least in the short to medium term.
However, the decline in delivery volumes signals that the rally may be driven more by speculative interest than by long-term investors accumulating shares. This dynamic warrants caution, as speculative rallies can be prone to sharp corrections if market sentiment shifts.
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Outlook and Investor Considerations
Investors should weigh the positive technical momentum and improved market sentiment against the reduced delivery participation and the speculative nature of recent activity. While the derivatives market signals a bullish stance, fundamental investors may prefer to monitor upcoming quarterly results and sectoral developments before committing significant capital.
Given the mid-cap status and moderate Mojo Score, SAIL remains a stock to watch for potential upside, especially if it sustains its current momentum and benefits from favourable macroeconomic conditions such as infrastructure spending and steel demand recovery.
In summary, the sharp increase in open interest combined with strong price action and volume patterns suggests that market participants are positioning for a positive near-term outlook on Steel Authority Of India Ltd. However, the cautious upgrade to a Hold rating reflects the need for balanced assessment amid mixed signals from delivery volumes and speculative activity.
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