Open Interest and Volume Dynamics
On 1 Jan 2026, Supreme Industries Ltd (NSE: SUPREMEIND) recorded an open interest (OI) of 16,241 contracts in its futures and options, marking a 10.32% increase from the previous OI of 14,722. This rise of 1,519 contracts is significant in the context of the stock’s recent trading activity, indicating fresh positions being established or existing ones being rolled over. The volume for the day stood at 17,201 contracts, closely aligned with the OI increase, suggesting active participation rather than mere unwinding.
The futures value traded was approximately ₹12,311.54 lakhs, while the options segment saw a substantial notional value of ₹9450.77 crores, culminating in a total derivatives turnover of ₹14,454.52 lakhs. This level of activity underscores the heightened interest among traders and institutional players in the stock’s near-term prospects.
Price Performance and Market Context
Supreme Industries outperformed its sector by 2.22% on the day, registering a 3.75% gain and touching an intraday high of ₹3,473.70. The stock has been on a two-day winning streak, delivering a cumulative return of 6.07%. This momentum is supported by rising investor participation, with delivery volumes on 31 Dec reaching 96,520 shares, a 25.62% increase over the five-day average delivery volume. Such a rise in delivery volume indicates genuine accumulation rather than speculative trading.
Technically, the stock is trading above its 5-day and 20-day moving averages but remains below its 50-day, 100-day, and 200-day averages. This suggests a short-term bullish trend within a longer-term consolidation phase. The stock’s liquidity is adequate for sizeable trades, with a 2% threshold of the five-day average traded value allowing for trade sizes up to ₹0.98 crore without significant market impact.
Market Positioning and Directional Bets
The surge in open interest combined with rising volumes points to increased directional bets on Supreme Industries. The derivatives market data suggests that traders are positioning for a potential upside, supported by the stock’s recent outperformance and improving delivery volumes. However, the Mojo Score of 36.0 and a recent downgrade from Hold to Sell on 23 Oct 2025 indicate caution from fundamental analysts, reflecting concerns over valuation or sectoral headwinds.
Market participants appear to be balancing these factors, with some adopting bullish stances in the short term while others remain wary of longer-term risks. The stock’s mid-cap status and a market capitalisation of ₹42,800 crore place it in a segment where volatility can be more pronounced, attracting both momentum traders and value investors.
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Sector and Benchmark Comparison
In comparison, the Plastic Products - Industrial sector gained 1.32% on the same day, while the Sensex rose marginally by 0.10%. Supreme Industries’ outperformance by over 2 percentage points relative to its sector highlights its relative strength amid broader market conditions. This is particularly notable given the sector’s mixed performance in recent months, where demand fluctuations and raw material cost pressures have weighed on margins.
The stock’s ability to sustain gains above short-term moving averages suggests that investor confidence is gradually improving, possibly driven by expectations of stabilising input costs or better operational efficiencies. However, the longer-term moving averages remain resistance levels that the stock must overcome to confirm a sustained uptrend.
Investor Sentiment and Delivery Volumes
Delivery volume trends provide further insight into investor sentiment. The 25.62% increase in delivery volume on 31 Dec to 96,520 shares indicates that more investors are holding shares rather than trading intraday, a positive sign of conviction. This contrasts with purely speculative activity and suggests that institutional or retail investors are accumulating positions in anticipation of favourable developments.
Such rising investor participation often precedes price rallies, as it reflects genuine demand for the stock. Coupled with the derivatives market’s rising open interest, this paints a picture of a stock attracting renewed interest from multiple market segments.
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Fundamental Assessment and Mojo Grade Implications
Despite the positive technical signals and market interest, the fundamental outlook remains cautious. Supreme Industries’ Mojo Score of 36.0 places it in the Sell category, a downgrade from Hold as of 23 Oct 2025. This reflects concerns over valuation metrics, competitive pressures, or sector-specific challenges that may limit upside potential.
The Market Cap Grade of 2 indicates a mid-cap classification, which often entails higher volatility and sensitivity to market cycles. Investors should weigh the technical momentum against these fundamental considerations before making allocation decisions.
Overall, the stock’s recent open interest surge and volume patterns suggest a tactical opportunity for short-term traders to capitalise on momentum. However, longer-term investors may prefer to monitor fundamental developments and sector trends closely before committing additional capital.
Outlook and Strategic Considerations
Looking ahead, the key levels to watch include the 50-day moving average, which currently acts as resistance. A sustained breakout above this level could trigger further buying interest and validate the recent open interest accumulation. Conversely, failure to breach these technical barriers may result in profit-taking and a reversion to the mean.
Market participants should also monitor broader sector dynamics, raw material price movements, and macroeconomic factors that influence industrial plastic demand. Given the stock’s liquidity and active derivatives market, it remains a viable candidate for tactical trades aligned with evolving market conditions.
Conclusion
Supreme Industries Ltd’s sharp increase in open interest and robust volume activity reflect a growing market focus on the stock amid improving price momentum. While technical indicators point to short-term bullishness, fundamental caution persists as reflected in the Mojo Grade downgrade. Investors and traders should balance these factors carefully, considering both the opportunities and risks inherent in the current market environment.
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