Tech Mahindra Sees Significant Open Interest Surge Amid Strong Market Momentum

Open Interest and Volume Dynamics

On 19 Jan 2026, Tech Mahindra’s open interest (OI) in derivatives rose sharply by 6,788 contracts, marking a 13.25% increase from the previous OI of 51,229 to 58,017. This substantial rise in OI is accompanied by a robust trading volume of 1,28,159 contracts, indicating heightened activity and fresh positions being established rather than mere unwinding of existing ones.

The futures segment alone accounted for a value of approximately ₹1,20,548 lakhs, while options contributed an astronomical ₹1,21,655 crores in notional value, culminating in a total derivatives value of ₹1,35,928 lakhs. Such figures underscore the significant liquidity and interest in Tech Mahindra’s derivatives, making it a focal point for traders and institutional investors alike.

Price Action and Technical Strength

Tech Mahindra’s underlying stock price closed at ₹1,727, just 0.5% shy of its 52-week high of ₹1,736.4. The stock has outperformed its sector by 4.35% on the day, registering a 3.33% gain, while the broader Sensex and sector indices declined by 0.63% and 1.00% respectively. This relative strength highlights the stock’s resilience amid broader market weakness.

Moreover, the stock has recorded consecutive gains over the past two sessions, delivering an impressive 8.76% return in this short span. Intraday, it touched a high of ₹1,734.9, reflecting strong buying interest. Tech Mahindra is trading comfortably above its key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – signalling a sustained uptrend and positive momentum.

Investor Participation and Liquidity

Investor participation has notably increased, with delivery volumes on 16 Jan reaching 18.08 lakh shares, a 67.91% rise compared to the five-day average delivery volume. This surge in delivery volume suggests genuine accumulation by long-term investors rather than speculative trading alone.

Liquidity remains robust, with the stock’s average traded value supporting trade sizes of up to ₹7.13 crores based on 2% of the five-day average traded value. Such liquidity is crucial for institutional players to enter or exit positions without significant price impact, further enhancing the stock’s attractiveness.

Market Positioning and Directional Bets

The sharp increase in open interest alongside rising volumes typically indicates fresh directional bets being placed by market participants. Given the stock’s recent price appreciation and technical strength, it is plausible that traders are positioning for further upside in Tech Mahindra.

Options data, with an enormous notional value exceeding ₹1.21 lakh crores, suggests active hedging and speculative strategies are underway. The balance between call and put open interest, while not explicitly detailed here, is likely skewed towards calls, reflecting bullish sentiment. This is consistent with the stock’s upgrade from a Hold to a Buy rating by MarketsMOJO on 14 Jan 2026, supported by a Mojo Score of 72.0, indicating favourable fundamentals and technicals.

Tech Mahindra’s market capitalisation stands at a substantial ₹1,68,453 crores, categorising it as a large-cap stock within the Computers - Software & Consulting sector. The company’s strong market position and sectoral tailwinds further bolster investor confidence.

Comparative Sector and Market Context

While the broader sector and Sensex indices have experienced mild declines, Tech Mahindra’s outperformance highlights its relative strength. This divergence often attracts momentum traders and institutional investors seeking quality large-cap stocks with growth potential amid market volatility.

The stock’s ability to sustain above key moving averages and near 52-week highs suggests a positive technical setup that could attract further buying interest. Additionally, the rising delivery volumes indicate that the rally is supported by genuine investor conviction rather than speculative froth.

Outlook and Investor Takeaways

Tech Mahindra’s recent surge in open interest and volume, combined with its strong price performance and technical indicators, point towards a bullish market stance. The upgrade to a Buy rating by MarketsMOJO, supported by a solid Mojo Score of 72.0, reinforces the positive outlook.

Investors should note the stock’s proximity to its 52-week high, which may act as a resistance level in the short term. However, sustained investor participation and institutional interest could propel the stock beyond this threshold.

Given the stock’s liquidity and market cap, it remains an attractive option for both retail and institutional investors seeking exposure to the IT services sector’s growth story. Monitoring open interest trends and options activity will be crucial to gauge evolving market sentiment and potential price trajectories.

Risks and Considerations

Despite the positive signals, investors should remain cautious of broader market volatility and sector-specific headwinds such as global IT spending fluctuations and currency risks. The derivatives market can also exhibit rapid shifts in positioning, which may lead to increased volatility in the underlying stock price.

Prudent risk management and adherence to investment horizons are advisable when trading around such heightened open interest activity.

Conclusion

Tech Mahindra Ltd. is currently experiencing a significant surge in derivatives open interest, reflecting increased market participation and bullish sentiment. Supported by strong price action, rising volumes, and a recent upgrade in rating, the stock is well positioned for potential further gains. Investors should continue to monitor market positioning and technical indicators to capitalise on emerging opportunities within this large-cap IT services leader.

Unlock special upgrade rates for a limited period. Start Saving Now →