Open Interest and Volume Dynamics
The latest data reveals that Supreme Industries Ltd’s open interest (OI) in derivatives rose from 12,613 contracts to 14,171, an increase of 1,558 contracts or 12.35%. This surge in OI is accompanied by a robust volume of 12,337 contracts traded, indicating strong participation from market participants. The futures segment alone accounted for a value of approximately ₹9,596.46 lakhs, while options contributed a substantial ₹6,535.00 crores, culminating in a total derivatives value of ₹11,027.47 lakhs. The underlying stock price closed at ₹3,338, reflecting a 1.80% gain on the day.
The increase in open interest alongside rising volume typically suggests fresh capital entering the market, either through new long positions or short covering. In this case, the 12.35% OI growth coupled with a 1.94% one-day return outperformed the sector’s 1.14% and the Sensex’s 0.50%, signalling bullish sentiment among traders.
Technical Positioning and Moving Averages
From a technical standpoint, Supreme Industries Ltd’s price action is nuanced. The stock touched an intraday high of ₹3,379.80, marking a 3.22% rise during the session. It currently trades above its 5-day and 20-day moving averages, indicating short-term momentum. However, it remains below the 50-day, 100-day, and 200-day moving averages, suggesting that medium to long-term trends have yet to confirm a sustained uptrend.
Such a configuration often points to a stock in consolidation or early stages of a potential breakout. The rising delivery volume of 1.01 lakh shares on 30 Dec, which surged by 57.85% compared to the 5-day average, further supports increased investor participation and conviction in the stock’s near-term prospects.
Market Capitalisation and Quality Assessment
Supreme Industries Ltd is classified as a mid-cap company with a market capitalisation of ₹42,257 crores. Despite its sizeable market presence, the company’s Mojo Score stands at 37.0, with a Mojo Grade of Sell, downgraded from Hold on 23 Oct 2025. The Market Cap Grade is rated 2, reflecting moderate quality and growth prospects relative to peers in the Plastic Products - Industrial sector.
The downgrade in Mojo Grade signals caution among analysts, possibly due to valuation concerns or sector headwinds. Investors should weigh this against the recent surge in derivatives activity, which may reflect speculative positioning or anticipation of near-term catalysts.
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Directional Bets and Market Positioning
The surge in open interest and volume suggests that traders are actively repositioning in Supreme Industries Ltd’s derivatives. The increase in futures value to ₹9,596.46 lakhs indicates strong interest in outright directional bets, likely favouring long positions given the stock’s outperformance relative to the sector and Sensex.
Options activity, with a massive notional value exceeding ₹6,535 crores, points to significant hedging or speculative strategies. The disparity between futures and options values may imply that market participants are using options to express more nuanced views, such as volatility plays or protective hedges against adverse moves.
Given the stock’s current technical stance—above short-term moving averages but below longer-term ones—investors might be positioning for a breakout scenario. However, the downgrade to a Sell grade by MarketsMOJO suggests caution, as fundamental or valuation concerns may temper enthusiasm.
Liquidity and Trading Viability
Liquidity metrics reinforce the stock’s suitability for active trading. With a traded value sufficient to support trade sizes of up to ₹0.85 crore based on 2% of the 5-day average traded value, Supreme Industries Ltd offers adequate depth for institutional and retail investors alike. This liquidity supports the observed surge in derivatives activity and facilitates efficient price discovery.
Sector and Benchmark Comparison
Comparing Supreme Industries Ltd’s one-day return of 1.94% against the Plastic Products - Industrial sector’s 1.14% and the Sensex’s 0.50% highlights its relative strength. This outperformance, coupled with rising open interest, may attract momentum traders and short-term investors seeking to capitalise on sectoral tailwinds or company-specific developments.
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Investor Takeaway
The recent spike in open interest and volume in Supreme Industries Ltd’s derivatives signals a renewed focus on the stock by traders and investors. While the short-term technical indicators are encouraging, the stock’s position below key longer-term moving averages and the downgrade to a Sell grade warrant a cautious approach.
Investors should monitor upcoming quarterly results, sector developments, and broader market trends to gauge whether the current momentum can translate into sustained gains. The elevated options activity also suggests that volatility may increase, presenting both opportunities and risks.
In summary, Supreme Industries Ltd is at a critical juncture where increased market participation is evident, but fundamental and technical signals remain mixed. Prudent investors may consider balancing exposure with risk management strategies while closely tracking market positioning and derivative trends.
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