Tech Mahindra Sees Sharp Open Interest Surge Signalling Bullish Market Positioning

Open Interest and Volume Dynamics

On 19 Jan 2026, Tech Mahindra’s open interest (OI) in derivatives rose sharply by 7,182 contracts, a 14.02% increase from the previous figure of 51,229 to 58,411. This notable expansion in OI was accompanied by a robust volume of 1,54,391 contracts, underscoring strong participation from traders and investors alike. The futures segment alone accounted for a value of approximately ₹1,40,998 lakhs, while options contributed an even larger notional value of ₹1,47,104.86 crores, culminating in a total derivatives value of ₹1,59,388.04 lakhs.

This surge in open interest, coupled with elevated volumes, typically signals fresh capital inflows and new directional bets rather than mere position unwinding. The underlying stock price, trading at ₹1,730, is just 0.24% shy of its 52-week high of ₹1,736.40, reinforcing the bullish undertone in the market.

Price Performance and Technical Strength

Tech Mahindra has outperformed its sector peers, registering a 3.67% gain on the day, significantly ahead of the Computers - Software & Consulting sector’s decline of 0.93% and the broader Sensex’s fall of 0.54%. The stock has been on a two-day winning streak, delivering a cumulative return of 9.05% during this period. Intraday, it touched a high of ₹1,736, nearly matching its 52-week peak.

From a technical perspective, the stock is trading comfortably above all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling sustained upward momentum. The rising delivery volume of 18.08 lakh shares on 16 Jan, which surged 67.91% above the five-day average, further confirms strong investor participation and conviction in the stock’s near-term prospects.

Market Positioning and Directional Bets

The sharp rise in open interest alongside increasing volumes suggests that market participants are establishing fresh positions, likely anticipating further price appreciation. Given the stock’s proximity to its 52-week high and strong technical backdrop, the directional bias appears to be bullish. The increase in futures open interest, in particular, indicates that traders are taking leveraged long positions, betting on continued upside momentum.

Options market activity also supports this view. The substantial notional value in options contracts points to active hedging and speculative strategies, with call options likely dominating given the positive price action. This combination of futures and options positioning often precedes sustained trends, as institutional and retail investors align their strategies.

Fundamental and Market Context

Tech Mahindra, a leading player in the Computers - Software & Consulting sector, boasts a large market capitalisation of ₹1,68,453 crore. Its recent upgrade in Mojo Grade from Hold to Buy on 14 Jan 2026, with a Mojo Score of 72.0, reflects improving fundamentals and positive analyst sentiment. The company’s strong market position and consistent earnings growth underpin investor confidence, which is now manifesting in derivatives market activity.

Liquidity remains robust, with the stock’s average traded value supporting trade sizes up to ₹7.13 crore, ensuring smooth execution for institutional investors. This liquidity, combined with rising investor participation, creates a conducive environment for sustained price advances.

Implications for Investors

The confluence of rising open interest, strong volume, and positive price action in Tech Mahindra’s derivatives market signals a growing bullish consensus. Investors should note the stock’s technical strength and improving fundamental outlook, which have been recognised by recent upgrades in analyst ratings. However, as the stock nears its 52-week high, cautious monitoring of price action and volume patterns is advisable to confirm sustained momentum.

For traders, the elevated futures and options activity presents opportunities to capitalise on directional moves, but also necessitates prudent risk management given the inherent leverage in derivatives. The current market positioning suggests that participants are optimistic about Tech Mahindra’s near-term prospects, potentially driven by sector tailwinds and company-specific catalysts.

Conclusion

Tech Mahindra Ltd. is exhibiting clear signs of strengthening market interest through a marked increase in open interest and trading volumes in its derivatives segment. Supported by robust price performance and positive technical indicators, the stock is attracting fresh bullish bets from investors. The upgrade in Mojo Grade to Buy and a strong Mojo Score of 72.0 further validate the improving outlook. While the stock remains close to its 52-week high, the current market dynamics suggest that Tech Mahindra is well positioned for further gains, making it a compelling consideration for investors seeking exposure to the Computers - Software & Consulting sector.

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