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

Open Interest and Volume Dynamics

On 29 Dec 2025, SAIL’s open interest (OI) in derivatives rose sharply by 9,771 contracts, a 15.53% increase from the previous day’s 62,897 to 72,668. This notable expansion in OI was accompanied by a robust volume of 83,901 contracts, indicating heightened trading activity and fresh positions being established rather than merely unwinding existing ones.

The futures value stood at ₹2,20,441.73 lakhs, while the options segment exhibited an enormous notional value of ₹33,409.31 crores, underscoring the substantial interest in SAIL derivatives. The combined total derivatives value reached ₹2,26,762.07 lakhs, reflecting the stock’s growing prominence among traders and institutional participants.

Price Action and Technical Strength

SAIL’s underlying price closed at ₹140, just 3.53% shy of its 52-week high of ₹145.90. The stock outperformed its ferrous metals sector peers by 3.71% on the day, registering a 5.14% gain. Notably, it has been on a three-day consecutive winning streak, delivering a cumulative return of 6.88% over this period.

Intraday, the stock touched a high of ₹141.48, marking a 5.51% rise from the previous close. It is trading comfortably above all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling sustained bullish momentum and technical strength. This alignment of moving averages often attracts momentum-driven investors and traders looking for confirmation of an uptrend.

Investor Participation and Liquidity

Delivery volumes surged to 1.37 crore shares on 29 Dec, a remarkable 167.84% increase compared to the five-day average delivery volume. This spike in delivery volume indicates genuine investor interest and confidence in the stock’s prospects, as opposed to speculative intraday trading alone.

Liquidity remains ample, with the stock’s traded value supporting a trade size of approximately ₹5.4 crore based on 2% of the five-day average traded value. Such liquidity levels are favourable for institutional investors and large traders seeking to enter or exit positions without significant price impact.

Market Positioning and Sentiment

The surge in open interest alongside rising prices and volumes suggests that market participants are increasingly positioning for an upward move in SAIL. The increase in OI is typically interpreted as fresh long positions being built, especially when accompanied by price appreciation, as is the case here.

SAIL’s Mojo Score has improved to 58.0, upgrading its Mojo Grade from Sell to Hold as of 23 Dec 2025. This upgrade reflects a more balanced outlook, recognising the stock’s recent positive momentum while acknowledging lingering risks in the ferrous metals sector. The company’s market capitalisation stands at ₹55,638 crore, categorising it as a mid-cap stock with moderate institutional interest.

Sector-wise, SAIL’s 5.14% gain on the day outpaced the ferrous metals sector return of 1.34%, while the broader Sensex remained nearly flat, down 0.03%. This relative strength highlights SAIL’s leadership within its industry group and its appeal as a preferred stock among metal sector investors.

Fundamental and Technical Outlook

From a fundamental perspective, Steel Authority Of India Ltd. continues to benefit from steady demand in the steel industry, supported by infrastructure development and government initiatives. However, raw material cost pressures and global steel price volatility remain key risks to monitor.

Technically, the stock’s consistent gains over the past three sessions and its position above all major moving averages suggest a strong uptrend. The proximity to the 52-week high indicates potential for a breakout, which could attract further buying interest if sustained.

Investors should watch for confirmation of this trend through continued volume support and open interest growth, as well as any shifts in sector dynamics or macroeconomic factors that could influence steel demand and pricing.

Implications for Investors and Traders

The marked increase in open interest and volume in SAIL derivatives signals a growing conviction among traders about the stock’s near-term upside potential. This is further supported by the stock’s technical strength and improving fundamental outlook.

For investors, the Hold rating with a Mojo Score of 58.0 suggests a cautious but optimistic stance. While the stock has demonstrated resilience and momentum, it remains prudent to monitor sector headwinds and broader market conditions.

Traders may consider leveraging the derivatives market to capitalise on the anticipated directional move, given the ample liquidity and active participation. However, risk management remains crucial, especially in a sector susceptible to cyclical fluctuations and commodity price swings.

Conclusion

Steel Authority Of India Ltd.’s recent surge in open interest and volume in the derivatives market, combined with strong price performance and technical indicators, points to a constructive market sentiment. The stock’s upgrade from Sell to Hold and its outperformance relative to sector peers reinforce its appeal as a mid-cap contender in the ferrous metals space.

Investors and traders should continue to monitor open interest trends, volume patterns, and price action closely to gauge the sustainability of this momentum. While opportunities exist, a balanced approach considering both fundamental and technical factors will be key to navigating the evolving market landscape.

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