Waaree Energies Sees Surge in Call Option Activity Amid Sharp Price Decline

Volatility and Price Action Set the Stage

On 25 February 2026, Waaree Energies Ltd (underlying ticker: WAAREEENER) experienced a turbulent trading session marked by a 14.38% drop in its stock price, closing at ₹2,617. This decline notably underperformed its sector, which fell by only 0.71%, and contrasted with the Sensex’s modest 0.57% gain. The stock opened with a gap down of 6.76% and touched an intraday low of ₹2,570, representing a 15% drop from the previous close. Such volatility was underscored by an intraday price fluctuation of 6.73%, calculated from the weighted average price.

Adding to the bearish technical backdrop, Waaree Energies is trading below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling a sustained downtrend. However, rising investor participation, as evidenced by a delivery volume of 7.3 lakh shares on 24 February, which surged 118.21% above the five-day average, suggests growing interest in the stock despite the recent weakness.

Call Option Activity Indicates Bullish Positioning

Amid this price volatility, the options market reveals a contrasting narrative. The most active call options for Waaree Energies are concentrated on the 30 March 2026 expiry with a strike price of ₹3,000. A total of 3,771 contracts were traded, generating a turnover of approximately ₹3.23 crores (322.77 lakhs). Open interest stands at 1,487 contracts, indicating sustained interest and potential accumulation at this strike level.

The ₹3,000 strike price is notably above the current underlying value of ₹2,617, implying that traders are positioning for a significant upside move of around 14.6% over the next month. This bullish stance is particularly striking given the recent price weakness and suggests that market participants anticipate a recovery or positive developments in the near term.

Fundamental and Market Context

Waaree Energies operates within the Other Electrical Equipment industry and is classified as a mid-cap company with a market capitalisation of ₹74,464.48 crores. The company’s Mojo Score has recently improved to 78.0, earning a Buy grade as of 9 December 2025, an upgrade from its previous Hold rating. This upgrade reflects enhanced fundamentals and positive outlooks from MarketsMOJO’s proprietary analysis, which factors in financial metrics, trend assessments, and quality grades.

Despite the recent price correction, the improved Mojo Grade and rising call option interest suggest that institutional and retail investors alike are positioning for a rebound. The stock’s liquidity profile supports sizeable trades, with an average traded value sufficient to accommodate transactions worth ₹8.86 crores, based on 2% of the five-day average traded value.

Expiry Patterns and Investor Sentiment

The concentration of call option activity at the 30 March 2026 expiry is consistent with a typical monthly cycle, where traders position ahead of quarterly results, policy announcements, or sectoral developments. The sizeable open interest at the ₹3,000 strike price suggests that investors are not merely speculating but are potentially hedging or expressing conviction in a price recovery above this level within the next five weeks.

Given the stock’s recent underperformance relative to its sector and the broader market, this call option activity may also reflect a contrarian view, with investors anticipating a reversal in trend. The fact that the weighted average price of traded shares was closer to the day’s low further supports the notion that bargain hunters are active, possibly laying the groundwork for a rebound.

Risks and Considerations

While the bullish call option positioning is notable, investors should remain cautious given the stock’s current downtrend and high volatility. Trading below all major moving averages indicates that the bears remain in control in the short term. Furthermore, the 10.09% day change decline on 25 February 2026 underscores the potential for further downside if negative news or sectoral headwinds persist.

Market participants should also consider the broader macroeconomic environment and sector-specific factors impacting Other Electrical Equipment companies. Any adverse developments in raw material costs, regulatory changes, or demand fluctuations could weigh on Waaree Energies’ performance and dampen bullish option bets.

Outlook and Investor Takeaways

Waaree Energies Ltd’s recent upgrade to a Buy rating by MarketsMOJO, combined with the surge in call option activity at a strike price well above the current market level, suggests that investors are positioning for a meaningful recovery in the coming weeks. The stock’s mid-cap status and sizeable market capitalisation provide adequate liquidity and institutional interest, which could support a turnaround if positive catalysts emerge.

However, the prevailing technical weakness and high volatility warrant a cautious approach. Investors should monitor upcoming quarterly results, sector developments, and broader market trends closely. The options market activity offers a valuable signal of underlying bullish sentiment, but it should be weighed alongside fundamental and technical analyses before making investment decisions.

In summary, Waaree Energies presents an intriguing case of divergence between spot price performance and derivatives market positioning, highlighting the nuanced views held by different market participants.

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