Tech Mahindra Sees Significant Open Interest Surge Amid Bullish Market Momentum

Open Interest and Volume Dynamics

On 23 Jan 2026, Tech Mahindra’s open interest (OI) in derivatives rose sharply to 60,708 contracts from 53,039 the previous day, marking an increase of 7,669 contracts or 14.46%. This substantial rise in OI indicates fresh positions being established rather than existing ones being squared off. The volume for the day stood at 43,589 contracts, supporting the increased OI and signalling active participation from traders.

The futures segment alone accounted for a futures value of approximately ₹1,85,333 lakhs, while the options segment’s notional value was significantly higher at ₹26,258.28 crores. The combined derivatives turnover thus reflects robust liquidity and heightened interest in Tech Mahindra’s contracts.

Price Performance and Technical Context

Tech Mahindra’s underlying share price closed at ₹1,705, just 1.92% shy of its 52-week high of ₹1,736.4. The stock has outperformed its sector by 0.97% on the day and has recorded gains for three consecutive sessions, cumulatively rising by 1.5%. Notably, the share is trading above all key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – underscoring a strong bullish trend.

Despite the positive price action, delivery volumes have declined by 21.35% compared to the five-day average, with 19.27 lakh shares delivered on 22 Jan. This divergence suggests that while short-term speculative activity is increasing, longer-term investor participation remains subdued, possibly indicating that traders are favouring derivatives for leveraged exposure rather than outright stock accumulation.

Market Positioning and Directional Bets

The surge in open interest alongside rising prices and volumes typically signals fresh bullish bets. Market participants appear to be positioning for further appreciation in Tech Mahindra’s stock, supported by its strong fundamentals and sectoral tailwinds in the software and consulting industry.

Tech Mahindra’s recent upgrade from a Hold to a Buy rating by MarketsMOJO on 14 Jan 2026, with a Mojo Score of 71.0, reinforces the positive outlook. The company’s large-cap status with a market capitalisation of ₹1,67,022.89 crores adds to its appeal among institutional investors seeking stable growth opportunities.

Given the current open interest increase of 14.46%, traders may be employing a mix of futures long positions and call option buying strategies to capitalise on anticipated upward momentum. The substantial options notional value suggests active call option writing and buying, which often precedes directional moves in the underlying stock.

Comparative Sector and Market Context

Tech Mahindra’s 1.03% one-day return on 23 Jan contrasts favourably with the sector’s marginal decline of 0.03% and the broader Sensex’s fall of 0.91%. This relative strength highlights the stock’s resilience amid broader market weakness and may be attracting fresh capital flows.

Liquidity remains adequate, with the stock’s average traded value supporting trade sizes up to ₹15.62 crores based on 2% of the five-day average traded value. This ensures that institutional investors can enter or exit positions without significant market impact, further encouraging participation.

However, the decline in delivery volumes suggests caution among long-term holders, possibly reflecting profit-booking or rotation into other sectors. The derivatives market activity, therefore, provides a more immediate gauge of sentiment, which currently leans bullish.

Fundamental and Technical Ratings

MarketsMOJO’s upgrade to a Buy rating with a Mojo Grade of 71.0 reflects improved fundamentals and technical strength. The company’s large-cap status and strong industry positioning in the Computers - Software & Consulting sector underpin this positive assessment.

Investors should note that while the open interest surge and price momentum are encouraging, the stock remains close to its 52-week high, which may invite profit-taking in the near term. Monitoring changes in open interest alongside price and volume will be crucial to confirm sustained directional conviction.

Outlook and Investor Considerations

Given the current market positioning, investors should consider the open interest surge as a bullish signal, reflecting confidence in Tech Mahindra’s near-term prospects. The stock’s strong technical setup, combined with positive sectoral trends in software and consulting, supports this view.

However, the reduced delivery volumes and proximity to the 52-week high warrant a cautious approach. Investors may prefer to monitor derivative activity closely for signs of profit-taking or reversal, especially if open interest begins to decline or volumes taper off.

For traders, the elevated options activity offers opportunities to employ strategies such as bull call spreads or long futures positions to capitalise on expected upward momentum while managing risk.

Overall, Tech Mahindra’s derivatives market activity provides valuable insight into evolving market sentiment, signalling a positive directional bias that aligns with its upgraded fundamental rating and strong price performance.

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