Open Interest and Volume Dynamics
The latest data reveals that Supreme Industries Ltd’s open interest (OI) in futures and options contracts rose from 13,804 to 15,427 contracts, an increase of 1,623 contracts or 11.76% on 3 Feb 2026. This rise in OI was accompanied by a total traded volume of 22,919 contracts, indicating robust participation in the derivatives market. The futures segment alone accounted for a value of approximately ₹39,154 lakhs, while options contracts contributed a staggering ₹10,907 crores in notional value, underscoring the significant scale of derivatives trading in this stock.
The underlying stock price closed at ₹3,633, having touched an intraday high of ₹3,719.8, up 3.3% during the session. However, the stock’s 1-day return of 1.03% lagged behind the Plastic Products sector’s gain of 2.39% and the Sensex’s 2.80% rise, suggesting relative underperformance despite the surge in derivatives activity.
Market Positioning and Directional Bets
The increase in open interest alongside rising volumes typically signals fresh capital entering the market, often interpreted as a confirmation of the prevailing trend. However, in Supreme Industries Ltd’s case, the mixed price action and underperformance relative to sector and benchmark indices suggest a more nuanced scenario.
Investors appear to be positioning for potential volatility or a directional shift. The stock has been on a two-day consecutive gain streak, delivering a cumulative return of 4.16%, yet it remains below its 100-day and 200-day moving averages, indicating that longer-term bearish pressures persist. The fact that the stock trades above its 5-day, 20-day, and 50-day averages but below the longer-term averages points to a possible short-term recovery attempt within a broader downtrend.
Open interest growth of nearly 12% in a single session is significant for a mid-cap stock with a market capitalisation of ₹46,297 crores. This suggests that traders are either building fresh long positions anticipating a breakout or establishing hedges against potential downside risks. The delivery volume on 2 Feb 2026 fell sharply by 59.58% compared to the 5-day average, indicating reduced investor participation in the cash segment, which often precedes increased speculative activity in derivatives.
Valuation and Quality Assessment
Supreme Industries Ltd currently holds a Mojo Score of 34.0 with a Mojo Grade of Sell, downgraded from Hold on 23 Oct 2025. The Market Cap Grade stands at 2, reflecting moderate market capitalisation relative to peers. These ratings suggest caution, as the company faces challenges in sustaining momentum amid sectoral headwinds and broader market volatility.
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Sectoral Context and Comparative Performance
The Plastic Products - Industrial sector gained 2.1% on the day, outperforming Supreme Industries Ltd’s 1.03% rise. This divergence highlights the stock’s relative weakness within its industry group. The sector’s broader strength is driven by improving demand fundamentals and easing raw material costs, factors that have yet to fully translate into Supreme Industries’ share price performance.
Liquidity remains adequate for sizeable trades, with the stock’s average traded value supporting transactions up to ₹1.73 crores based on 2% of the 5-day average. This liquidity profile facilitates active participation by institutional and retail traders alike, contributing to the observed open interest expansion.
Technical Indicators and Moving Averages
Technically, Supreme Industries Ltd’s price action shows a mixed picture. The stock is trading above its short- and medium-term moving averages (5-day, 20-day, 50-day), signalling some near-term strength. However, it remains below the 100-day and 200-day moving averages, which often act as resistance levels and indicate prevailing longer-term bearish trends.
This technical setup suggests that while short-term traders may be optimistic, longer-term investors remain cautious. The recent open interest surge could be reflective of this dichotomy, with speculative positions increasing amid uncertainty about the stock’s ability to sustain a breakout.
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Implications for Investors and Traders
The sharp rise in open interest combined with moderate price gains and underperformance relative to sector benchmarks suggests that market participants are hedging their bets on Supreme Industries Ltd. The stock’s current Mojo Grade of Sell and recent downgrade indicate that fundamental challenges persist, despite short-term technical improvements.
Investors should closely monitor the evolution of open interest and volume patterns in the coming sessions. A sustained increase in OI accompanied by rising prices and sector outperformance could signal a genuine recovery. Conversely, if OI growth occurs alongside price stagnation or decline, it may reflect mounting bearish bets or increased volatility expectations.
Given the stock’s liquidity and active derivatives market, traders have ample opportunity to implement strategies that capitalise on directional moves or volatility spikes. However, the mixed signals warrant a cautious approach, favouring risk management and close attention to broader market and sector trends.
Outlook and Conclusion
Supreme Industries Ltd’s recent open interest surge highlights a pivotal moment for the stock amid a complex market backdrop. While short-term momentum appears positive, longer-term technical and fundamental indicators counsel prudence. The stock’s downgrade to a Sell rating by MarketsMOJO on 23 Oct 2025 reflects these concerns.
Investors and traders should weigh the increased derivatives activity as a sign of heightened interest but not necessarily a clear directional signal. Monitoring price action relative to key moving averages and sector performance will be critical in assessing whether Supreme Industries Ltd can convert this momentum into sustained gains or if volatility and uncertainty will dominate.
In summary, the derivatives market activity in Supreme Industries Ltd underscores a dynamic and evolving investor sentiment, with open interest growth signalling both opportunity and caution in equal measure.
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