Open Interest and Volume Dynamics
On 21 January 2026, Tech Mahindra's open interest (OI) in derivatives rose sharply to 60,917 contracts from the previous 52,971, marking an increase of 7,946 contracts or 15.0%. This expansion in OI was accompanied by a volume of 61,935 contracts, indicating robust trading activity. The futures segment alone accounted for a value of approximately ₹2,60,922.6 lakhs, while the options segment's notional value was substantially higher at ₹37,603.5 crores, culminating in a total derivatives value of ₹2,64,298.5 lakhs.
The underlying stock price closed at ₹1,689, just 2.59% shy of its 52-week high of ₹1,736.4, underscoring the stock's resilience and bullish undertone. Despite a marginal day change of -0.04%, Tech Mahindra has outperformed its sector over the past two days, delivering a cumulative return of 0.83% while the sector lagged by 0.42% on the day.
Market Positioning and Moving Averages
Tech Mahindra's price is trading above all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling a sustained uptrend and positive momentum. This technical positioning often attracts institutional investors and traders looking for confirmation of strength before increasing exposure.
However, delivery volumes have seen a sharp decline, with the delivery volume on 21 January falling by 65.32% to 8.98 lakh shares compared to the five-day average. This suggests that while short-term trading interest in derivatives is rising, longer-term investor participation in the cash segment has moderated. The stock remains sufficiently liquid, with a trade size capacity of ₹14.46 crores based on 2% of the five-day average traded value, ensuring ease of entry and exit for sizeable positions.
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Implications of the Open Interest Surge
The 15.0% rise in open interest suggests that new positions are being established rather than existing ones being closed. This is often interpreted as a sign of conviction among traders and investors. Given the concurrent price strength and proximity to the 52-week high, the market appears to be positioning for further upside in Tech Mahindra.
Volume patterns reinforce this view, with futures and options activity indicating increased hedging and speculative interest. The substantial notional value in options contracts points to active call and put writing, which may reflect a range of strategies from directional bullish bets to volatility plays.
Mojo Score Upgrade and Market Sentiment
MarketsMOJO has upgraded Tech Mahindra's Mojo Grade from Hold to Buy as of 14 January 2026, reflecting improved fundamentals and technical outlook. The stock's Mojo Score stands at a robust 71.0, signalling favourable momentum and quality metrics. This upgrade aligns with the observed derivatives market activity and price action, reinforcing the positive sentiment surrounding the stock.
Tech Mahindra, a large-cap company with a market capitalisation of ₹1,65,700.27 crores, remains a key player in the Computers - Software & Consulting sector. Its recent performance, combined with the derivatives market positioning, suggests that investors are increasingly confident in its growth prospects amid a competitive technology landscape.
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Sector and Benchmark Comparison
While Tech Mahindra's one-day return was a modest 0.27%, it underperformed the sector's 0.86% gain and the Sensex's 0.48% rise on the same day. However, the stock's two-day consecutive gains and strong technical positioning suggest that it is consolidating before potentially resuming an upward trajectory.
The Computers - Software & Consulting sector remains a focal point for investors seeking growth in digital transformation and IT services. Tech Mahindra's improved market positioning and derivatives activity indicate that it is well placed to capitalise on sector tailwinds.
Investor Takeaways and Outlook
Investors should note the divergence between falling delivery volumes and rising derivatives open interest. This pattern often indicates that short-term traders and institutional participants are actively repositioning, while long-term holders may be adopting a wait-and-watch stance. The stock's liquidity and proximity to its 52-week high make it an attractive candidate for tactical trades and portfolio additions.
Given the upgraded Mojo Grade and strong derivatives market signals, Tech Mahindra appears poised for further gains, provided broader market conditions remain supportive. However, investors should remain vigilant for any shifts in volume or open interest trends that could signal a change in sentiment.
Conclusion
The recent surge in open interest for Tech Mahindra Ltd. highlights a growing bullish consensus among derivatives traders, supported by solid price action and technical strength. The upgrade in Mojo Grade to Buy and the stock’s standing as a large-cap leader in the software and consulting sector further bolster its appeal. While short-term delivery volumes have declined, the overall market positioning suggests that Tech Mahindra is attracting renewed interest as a potential outperformer in the near term.
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