"Mitä teet?" is much better. "Mitä olet tekemässä?" is grammaticaly correct, but feels very unnatural.
I usually add "sä", the colloquial "sinä" (you,) in there: "Mitä sä teet?". "Mitä sinä teet" is also OK.
The only time I would say "mitä olet tekemässä" is for a sarcastic emphasis.
Like if someone would say: A: Who you talking to? (B, who was previously daydreaming and taking to himself out loud returns back to planet earth) B: Wha? (Didn't hear the question) A: To whom were you speaking?