Open Interest and Volume Dynamics
On 10 Feb 2026, Supreme Industries Ltd (symbol: SUPREMEIND) recorded an open interest (OI) of 17,845 contracts, up from 15,365 the previous day, marking an increase of 2,480 contracts or 16.14%. This rise in OI was accompanied by a total volume of 25,653 contracts, indicating robust trading activity in the derivatives market. The futures segment alone accounted for a value of approximately ₹17,159 lakhs, while the options segment's notional value was significantly higher at ₹15,683 crores, culminating in a combined derivatives value of ₹19,217.57 lakhs.
The underlying stock price stood at ₹3,698, with the day's high touching ₹3,823.20, a 3.19% intraday gain. However, the weighted average price suggested that most volume traded closer to the lower end of the price range, hinting at cautious buying or profit-taking near resistance levels.
Market Positioning and Sentiment
The surge in open interest alongside increased volume typically signals fresh capital entering the market, often interpreted as a confirmation of the prevailing trend. However, Supreme Industries' price performance on the day was subdued, with a 0.60% decline compared to a 0.63% gain in its sector and a 0.16% rise in the Sensex. This divergence suggests that while derivatives traders are increasing their positions, the underlying equity market remains hesitant.
Further analysis of moving averages reveals that the stock price is trading above its 5-day, 20-day, and 50-day averages but remains below the 100-day and 200-day moving averages. This pattern indicates short-term strength amid longer-term consolidation or resistance, which may be influencing mixed investor sentiment.
Delivery volumes also rose by 6.26% to 1.58 lakh shares on 09 Feb, signalling rising investor participation in the cash market. The stock's liquidity remains adequate, with a trade size capacity of approximately ₹2.19 crore based on 2% of the 5-day average traded value, supporting active trading without excessive price impact.
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Directional Bets and Derivatives Positioning
The increase in open interest, particularly in the futures segment, suggests that traders are positioning for potential directional moves. Given the stock's recent underperformance relative to its sector and the broader market, some participants may be taking bearish stances, hedging existing long positions or speculating on a correction. Conversely, the rise in delivery volumes and the stock trading above short-term moving averages indicate that a segment of investors remains optimistic about near-term gains.
Options market data, with a substantial notional value exceeding ₹15,683 crores, points to active call and put writing and buying strategies. This activity often reflects a market bracing for volatility or a significant price move. The mixed signals from price action and derivatives positioning imply that market participants are divided, with some anticipating a rebound while others prepare for downside risks.
Mojo Score and Analyst Ratings
Supreme Industries Ltd currently holds a Mojo Score of 34.0, categorised as a 'Sell' grade by MarketsMOJO, downgraded from a previous 'Hold' rating on 23 Oct 2025. The downgrade reflects concerns over the stock's medium-term outlook amid sectoral headwinds and valuation pressures. The company's market capitalisation stands at ₹48,147 crore, placing it in the mid-cap segment with a Market Cap Grade of 2, indicating moderate size and liquidity.
Investors should weigh these ratings alongside the recent surge in derivatives activity, which may signal short-term trading opportunities but also heightened risk due to uncertain directional consensus.
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Sector and Market Context
The Plastic Products - Industrial sector has shown modest gains recently, with a 0.63% rise on the day Supreme Industries declined slightly. This divergence highlights the stock-specific challenges faced by Supreme Industries, including competitive pressures and input cost fluctuations. The broader Sensex index's 0.16% gain further underscores the stock's relative weakness.
Given the sector's cyclical nature and sensitivity to industrial demand, investors should monitor macroeconomic indicators and raw material price trends closely. The current derivatives market activity may be a precursor to increased volatility as traders adjust positions in response to evolving fundamentals.
Investor Takeaways
For investors and traders, the sharp rise in open interest in Supreme Industries Ltd's derivatives signals a period of heightened attention and potential price swings. While the stock's short-term technical indicators show some strength, the overall downgrade in Mojo Grade and underperformance relative to peers warrant caution.
Market participants should consider the mixed signals from volume, price action, and derivatives positioning before making directional bets. Those with a higher risk tolerance might explore short-term trading opportunities, while long-term investors may prefer to await clearer trend confirmation or consider alternative stocks within the sector.
In summary, Supreme Industries Ltd is at a crossroads, with derivatives market activity suggesting both opportunity and uncertainty. Close monitoring of open interest trends, price movements, and sector developments will be essential for informed decision-making in the coming weeks.
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