Open Interest and Volume Dynamics
On 31 Dec 2025, Supreme Industries Ltd (symbol: SUPREMEIND) recorded an open interest of 13,945 contracts in its derivatives, marking a significant increase of 1,332 contracts or 10.56% compared to the previous OI of 12,613. This rise in OI is accompanied by a substantial volume of 11,248 contracts traded on the day, reflecting active participation in both futures and options segments.
The futures segment alone accounted for a value of approximately ₹8,774.27 lakhs, while the options segment exhibited an enormous notional value of ₹5,959.37 crores, culminating in a total derivatives value of ₹10,097.11 lakhs. Such figures underscore the growing interest and liquidity in Supreme Industries’ derivatives, providing ample scope for traders to express directional views.
Price Performance and Market Context
Supreme Industries outperformed its sector on the day, delivering a 2.23% return compared to the sector’s 1.26% and the broader Sensex’s 0.40%. The stock touched an intraday high of ₹3,379.80, gaining 3.22% at peak levels. Notably, the stock price is trading above its 5-day and 20-day moving averages but remains below the longer-term 50-day, 100-day, and 200-day averages, indicating a short-term bullish momentum within a broader consolidation phase.
Investor participation has also risen sharply, with delivery volumes on 30 Dec reaching 1.01 lakh shares, a 57.85% increase over the five-day average delivery volume. This surge in delivery volume suggests genuine accumulation rather than speculative trading, reinforcing the positive price action observed.
Market Positioning and Directional Bets
The increase in open interest alongside rising volumes typically indicates fresh positions being established rather than existing ones being squared off. In Supreme Industries’ case, the 10.56% OI growth coupled with a 1.91% day change in price points to a bullish bias among market participants. Traders appear to be positioning for further upside, supported by the stock’s relative outperformance and improving liquidity conditions.
However, the stock’s Mojo Score of 37.0 and a Mojo Grade of Sell, downgraded from Hold on 23 Oct 2025, suggest caution. The downgrade reflects concerns over valuation or fundamental factors despite the short-term technical strength. The Market Cap Grade of 2 indicates mid-cap status with moderate liquidity, which aligns with the observed trading volumes and value.
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Technical and Fundamental Assessment
From a technical standpoint, the stock’s price action above short-term moving averages signals potential for further gains, but the resistance posed by longer-term averages warrants prudence. The rising delivery volumes and increasing open interest reinforce the notion of genuine investor interest rather than speculative noise.
Fundamentally, Supreme Industries operates in the Plastic Products - Industrial sector with a market capitalisation of ₹42,257 crores, categorising it as a mid-cap entity. Despite the recent downgrade to a Sell rating by MarketsMOJO, the stock’s liquidity remains adequate for sizeable trades, with a 2% threshold of the five-day average traded value supporting trade sizes up to ₹0.85 crore.
Investors should weigh the short-term technical momentum against the fundamental caution signalled by the Mojo Grade downgrade. The current market positioning suggests that traders are betting on a near-term rally, but the underlying fundamentals and valuation metrics may temper sustained upside.
Implications for Investors and Traders
The surge in open interest and volume in Supreme Industries’ derivatives indicates a shift in market sentiment and positioning. Traders are likely taking fresh long positions, anticipating further price appreciation. This is supported by the stock’s outperformance relative to its sector and the Sensex, as well as increased delivery volumes signalling genuine accumulation.
However, the downgrade in Mojo Grade to Sell and the moderate Mojo Score highlight underlying risks. Investors should monitor the stock’s ability to break above longer-term moving averages and watch for any changes in open interest trends that might signal profit-taking or reversal.
Given the mixed signals, a cautious approach is advisable. Short-term traders may capitalise on the momentum, while long-term investors should consider the fundamental outlook and valuation before committing fresh capital.
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Conclusion: Balancing Momentum with Caution
The recent surge in open interest and trading volumes in Supreme Industries Ltd’s derivatives market reflects a growing bullish sentiment among traders, supported by strong intraday price gains and rising investor participation. Yet, the fundamental downgrade and moderate Mojo Score counsel prudence.
Investors and traders should closely monitor the evolving open interest patterns and price action relative to key moving averages to gauge the sustainability of the current momentum. While short-term opportunities appear promising, the stock’s mid-cap status and sector dynamics necessitate a balanced approach, weighing technical signals against fundamental considerations.
As always, diversification and risk management remain paramount in navigating the complexities of mid-cap stocks with fluctuating market sentiment.
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