Tata Motors Passenger Vehicles Sees Surge in Call Option Activity Amid Bullish Sentiment

Robust Call Option Trading Highlights Bullish Positioning

On 1 February 2026, TMPV's most active call option was the 360 strike price expiring on 24 February 2026. This contract saw 6,776 contracts traded, generating a turnover of ₹703.08 lakhs. Open interest stood at 3,701 contracts, indicating sustained investor interest in this strike level. The underlying stock price was ₹357.35, just shy of the 360 strike, suggesting traders are positioning for a potential upside move above this key resistance level within the next three weeks.

The high volume and turnover in call options at this strike price reflect a predominantly bullish outlook, with market participants anticipating a rally beyond ₹360. This is further supported by the stock’s intraday high of ₹360.65, a 3.03% gain on the day, underscoring the possibility of a breakout above this level.

Stock Performance and Technical Context

Tata Motors Passenger Vehicles Ltd outperformed its sector by 0.61% on the day, registering a 2.23% gain compared to the sector’s 1.85% and the Sensex’s modest 0.19% rise. The stock’s price currently trades above its 5-day, 20-day, and 50-day moving averages, signalling short- to medium-term strength. However, it remains below the 100-day and 200-day moving averages, indicating that longer-term resistance levels have yet to be overcome.

Investor participation has been rising, with delivery volumes reaching 65.76 lakh shares on 30 January 2026, a 13.87% increase over the five-day average. This heightened activity suggests growing conviction among investors, which could provide further momentum for the stock in the near term.

Market Capitalisation and Rating Update

With a market capitalisation of ₹1,28,624 crore, Tata Motors Passenger Vehicles Ltd is classified as a large-cap stock within the automobile sector. Despite the recent positive price action, the company’s Mojo Score stands at 36.0, reflecting a Sell rating as of 4 November 2024, downgraded from Hold. The downgrade was driven by deteriorating quality grades and market cap assessments, signalling caution for investors despite the current bullish option activity.

Expiry Patterns and Investor Sentiment

The February 2026 expiry is attracting significant attention, with the 360 strike price emerging as a focal point for call option buyers. The proximity of the current stock price to this strike suggests that investors are betting on a near-term rally, potentially driven by upcoming corporate developments or sector tailwinds.

Open interest data reveals that while the 360 strike is heavily traded, the overall open interest remains moderate at 3,701 contracts, indicating room for further accumulation. This pattern is typical ahead of expiry dates, as traders adjust their positions to capitalise on expected price movements.

Liquidity and Trading Viability

Liquidity metrics confirm that TMPV is well-suited for sizeable trades, with the stock’s traded value averaging around ₹8.06 crore based on 2% of the five-day average. This level of liquidity supports active participation from institutional and retail investors alike, facilitating efficient price discovery and option contract execution.

Sector and Market Context

The automobile sector has shown resilience, with TMPV’s 1-day return of 2.23% outpacing the sector’s 1.85% and the Sensex’s 0.19%. This relative strength may be attributed to improving demand dynamics, new model launches, or positive policy developments benefiting passenger vehicle manufacturers.

However, investors should weigh these gains against the company’s current Mojo Grade of Sell, which reflects underlying concerns about valuation and quality metrics. The divergence between technical momentum and fundamental ratings suggests a nuanced risk-reward profile for prospective buyers.

Investor Takeaways and Outlook

Investors tracking Tata Motors Passenger Vehicles Ltd should note the strong call option activity as a signal of bullish positioning, particularly around the ₹360 strike price with the February expiry looming. The stock’s ability to surpass this level could trigger further gains, supported by rising delivery volumes and positive short-term technical indicators.

Nonetheless, the company’s downgraded Mojo Grade and modest overall score advise caution. Market participants should consider the broader fundamental context alongside technical signals before committing capital. The divergence between short-term momentum and longer-term quality metrics underscores the importance of a balanced investment approach.

Given the stock’s liquidity and active options market, traders can efficiently express directional views, but should remain vigilant for volatility around expiry dates. Monitoring open interest trends and strike price concentrations will be key to anticipating potential price swings.

Conclusion

Tata Motors Passenger Vehicles Ltd is currently at a crossroads, with strong bullish sentiment evident in the options market contrasting with a cautious fundamental rating. The surge in call option contracts at the ₹360 strike price ahead of the 24 February 2026 expiry highlights investor optimism for a near-term rally. However, the company’s Sell rating and quality concerns temper enthusiasm, suggesting that investors should carefully weigh technical momentum against underlying risks.

As the expiry date approaches, market participants will be closely watching price action around the ₹360 level to gauge the sustainability of the current uptrend. For those seeking exposure to the automobile sector, TMPV offers an intriguing but complex opportunity, demanding a nuanced and well-informed investment strategy.

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