Tech Mahindra Sees Significant Open Interest Surge Amid Positive Market Momentum

Open Interest and Volume Dynamics

On 21 January 2026, Tech Mahindra's open interest in derivatives rose sharply from 52,971 contracts to 59,380, an absolute increase of 6,409 contracts or 12.1%. This expansion in OI is significant, especially when viewed alongside the day's volume of 55,783 contracts, indicating fresh positions being established rather than mere unwinding of existing ones. The futures segment alone accounted for a futures value of approximately ₹2,21,810 lakhs, while options contributed a substantial ₹35,229 crores in notional value, underscoring the heavy derivatives activity surrounding the stock.

The underlying stock price closed at ₹1,693, just 2.53% shy of its 52-week high of ₹1,736.4, signalling strong price momentum. The stock has gained 0.9% over the past two consecutive sessions, outperforming the Sensex's modest 0.19% gain but slightly lagging the sector's 0.61% rise. Notably, Tech Mahindra is trading above all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — reinforcing its bullish technical stance.

Market Positioning and Investor Behaviour

The surge in open interest alongside rising prices typically indicates fresh long positions being taken, reflecting bullish sentiment. However, the delivery volume tells a more nuanced story. On 21 January, delivery volume dropped sharply by 65.32% to 8.98 lakh shares compared to the 5-day average, suggesting that while traders are active in derivatives, actual investor participation in the cash segment has waned. This divergence often points to speculative positioning or hedging strategies rather than outright accumulation by long-term investors.

Liquidity remains robust, with the stock's average traded value supporting trade sizes up to ₹14.46 crores comfortably, ensuring that the recent OI increase is backed by sufficient market depth. The market cap of Tech Mahindra stands at a commanding ₹1,66,013.78 crores, categorising it firmly as a large-cap stock, which typically attracts institutional interest and sophisticated trading strategies.

Directional Bets and Derivatives Strategy

The increase in open interest, particularly in futures and options, suggests that market participants are positioning for a potential upward move in Tech Mahindra’s share price. The stock’s proximity to its 52-week high and its sustained trading above all major moving averages provide technical validation for bullish bets. The futures value of ₹2,21,810 lakhs and the massive options notional value exceeding ₹35,229 crores indicate that traders are actively deploying complex strategies, possibly including call buying, bull call spreads, or protective puts to capitalise on expected volatility or directional moves.

Given the Mojo Score of 71.0 and an upgraded Mojo Grade from Hold to Buy as of 14 January 2026, the stock’s fundamental and technical outlook has improved. This upgrade reflects enhanced earnings visibility, sector tailwinds, and positive market sentiment. The Market Cap Grade of 1 further confirms Tech Mahindra’s stature as a large-cap stock with stable fundamentals, making it a preferred choice for institutional investors seeking exposure to the IT services sector.

Sector and Market Context

Within the Computers - Software & Consulting sector, Tech Mahindra’s performance is inline with sectoral trends, which have been buoyed by robust demand for digital transformation services globally. The sector’s 0.61% gain on the day outpaced the broader Sensex, highlighting investor preference for technology stocks amid ongoing macroeconomic uncertainties. Tech Mahindra’s steady gains over the last two sessions and its technical strength position it well to capture further upside should sector momentum continue.

However, the sharp fall in delivery volumes signals caution. Reduced investor participation in the cash market may imply that the recent price gains are driven more by short-term traders and derivatives players rather than long-term holders. This dynamic warrants close monitoring, as sustained price appreciation typically requires broader investor conviction.

Implications for Investors

For investors, the surge in open interest combined with positive technical indicators and an upgraded Mojo Grade suggests that Tech Mahindra is currently favoured by market participants. The stock’s large-cap status and sector leadership provide a degree of stability, while the derivatives activity points to increased speculative interest and potential for near-term price volatility.

Investors should weigh the bullish signals against the declining delivery volumes, which may indicate a lack of conviction among long-term holders. Monitoring subsequent sessions for sustained increases in delivery volumes and price confirmation above the 52-week high will be critical to validate the current momentum.

Overall, Tech Mahindra’s current market positioning and derivatives activity reflect a cautiously optimistic outlook, with traders and investors positioning for further gains while remaining alert to potential short-term fluctuations.

Conclusion

Tech Mahindra Ltd.’s recent 12.1% rise in open interest in derivatives, supported by strong volume and price action near its 52-week high, signals a shift in market positioning towards a bullish stance. The upgraded Mojo Grade to Buy and robust technical indicators reinforce this positive outlook. However, the sharp decline in delivery volumes suggests that the rally is currently driven more by derivatives traders than by broad investor participation. As such, investors should remain vigilant and consider both the opportunities and risks inherent in the current market environment.

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