Mphasis Ltd Sees Sharp Open Interest Surge Amid Mixed Price Action and Falling Investor Participation

Open Interest and Volume Dynamics

The open interest (OI) in Mphasis derivatives surged from 25,627 contracts to 30,480 contracts, an increase of 4,853 contracts or 18.94%. This sharp rise in OI was accompanied by a total volume of 45,841 contracts traded on the day, indicating robust participation from traders and investors in the futures and options market. The futures segment alone accounted for a value of approximately ₹63,029 lakhs, while the options segment saw an astronomical notional value of ₹29,383 crores, culminating in a total derivatives value of ₹66,066 lakhs.

The underlying stock price closed at ₹2,749, having touched an intraday high of ₹2,879 (up 2.45%) and a low of ₹2,735.4 (down 2.66%). Notably, the weighted average price of traded volumes skewed closer to the day’s low, suggesting selling pressure despite the intraday bounce.

Market Positioning and Price Action

Mphasis underperformed its sector by 2.63% and posted a 1-day return of -2.41%, lagging behind the sector’s modest 0.33% gain and the Sensex’s near-flat 0.03% movement. The stock’s moving averages reveal a mixed technical picture: it remains above its 200-day moving average, a long-term bullish indicator, but trades below its 5-day, 20-day, 50-day, and 100-day averages, signalling short- to medium-term weakness and potential consolidation.

Investor participation appears to be waning, with delivery volumes on 22 Jan falling sharply by 64.85% compared to the five-day average, indicating reduced conviction among long-term holders. However, liquidity remains adequate, with the stock’s traded value supporting sizeable trades up to ₹4.55 crores without significant market impact.

Interpreting the Open Interest Surge

The near 19% jump in open interest suggests fresh positions are being established rather than existing ones being squared off. This increase, coupled with a volume of 45,841 contracts, points to a renewed interest in Mphasis derivatives, possibly reflecting divergent views on the stock’s near-term direction.

Given the stock’s underperformance and the weighted average price leaning towards the day’s low, it is plausible that a significant portion of the new open interest is on the put side or short futures, indicating bearish bets. However, the intraday high of ₹2,879 and the stock’s position above the 200-day moving average could also attract buyers anticipating a rebound, creating a tug-of-war scenario in market positioning.

Mojo Score and Analyst Ratings

Mphasis currently holds a Mojo Score of 60.0 with a Mojo Grade of Hold, downgraded from Buy on 19 Jan 2026. This reflects a cautious stance by analysts amid mixed technical and fundamental signals. The company’s market capitalisation stands at ₹52,678 crores, categorising it as a mid-cap stock with a Market Cap Grade of 2, indicating moderate size and liquidity.

The downgrade from Buy to Hold suggests that while Mphasis retains growth potential, investors should be wary of near-term volatility and the possibility of sideways or downward price movement. The recent open interest surge may be a manifestation of this uncertainty, with market participants positioning for both upside and downside scenarios.

Sector and Broader Market Context

The Computers - Software & Consulting sector has shown resilience with a modest 0.33% gain on the day, outperforming Mphasis. This divergence could be due to company-specific factors such as earnings outlook, client wins, or competitive pressures. The broader Sensex’s near-flat movement at 0.03% suggests a lack of strong directional cues from the overall market, placing greater eMphasis on stock-specific developments.

Investors should also note the falling delivery volumes, which may indicate reduced long-term commitment, potentially increasing short-term volatility. The stock’s liquidity profile remains sufficient for institutional trades, which could facilitate larger directional bets in the derivatives market.

Investor Takeaways and Outlook

The surge in open interest in Mphasis derivatives signals a pivotal moment for the stock, with market participants actively repositioning amid mixed technical signals and sector dynamics. The downgrade to Hold by analysts underscores the need for caution, as the stock navigates resistance levels and fluctuating investor sentiment.

Traders should monitor the evolution of open interest in conjunction with price action to discern whether the dominant directional bets are bullish or bearish. A sustained increase in OI alongside rising prices would confirm fresh buying interest, while a rise in OI with falling prices would indicate growing bearish sentiment.

Given the current scenario, investors may consider a balanced approach, keeping an eye on key support levels near the 200-day moving average and resistance around recent intraday highs. The falling delivery volumes suggest that short-term traders may dominate price movements, increasing volatility.

Overall, Mphasis remains a mid-cap stock with solid fundamentals but faces near-term headwinds that warrant careful analysis of market positioning and derivative activity before committing to fresh investments.

Unlock special upgrade rates for a limited period. Start Saving Now →