Bajaj Auto Ltd. Technical Momentum Shifts Signal Bullish Outlook

Technical Trend Evolution and Price Momentum

Bajaj Auto’s technical trend has upgraded from mildly bullish to bullish, reflecting a strengthening in price momentum. The stock closed at ₹9,595.50, up 1.07% from the previous close of ₹9,494.20, touching a high of ₹9,900.00 during the trading session, which is just shy of its 52-week high of ₹9,900.00. This price action indicates robust buying interest near key resistance levels, suggesting that the stock is poised to test or potentially breach its recent highs.

The daily moving averages have turned bullish, reinforcing the positive price trajectory. This is a critical development as moving averages often act as dynamic support and resistance levels, and their bullish alignment typically attracts momentum traders and institutional investors alike.

MACD and RSI: Divergent Signals

The Moving Average Convergence Divergence (MACD) indicator presents a bullish outlook on both weekly and monthly charts, signalling that the underlying momentum is supportive of further upside. The MACD’s positive crossover and widening histogram bars on the weekly timeframe suggest accelerating buying pressure, which is a favourable sign for medium-term investors.

Conversely, the Relative Strength Index (RSI) on both weekly and monthly charts remains neutral, providing no definitive signal at present. This lack of overbought or oversold conditions implies that the stock has room to run without immediate risk of a technical pullback, offering a balanced risk-reward profile for traders.

Bollinger Bands and KST Indicator Insights

Bollinger Bands on weekly and monthly charts are mildly bullish, indicating that price volatility is contained within an upward trending channel. The stock’s price hugging the upper band suggests sustained buying interest, although caution is warranted as extended moves along the band can precede consolidation phases.

The Know Sure Thing (KST) indicator presents a mixed picture: bullish on the weekly chart but mildly bearish on the monthly chart. This divergence highlights a potential short-term momentum acceleration against a longer-term cautionary tone, signalling that investors should monitor monthly momentum closely for any signs of deterioration.

On-Balance Volume and Dow Theory Confirmation

The On-Balance Volume (OBV) indicator is mildly bullish on the weekly chart, suggesting that volume trends are supporting the recent price advances. However, the monthly OBV shows no clear trend, indicating that longer-term volume confirmation remains elusive. This mixed volume picture advises investors to watch for sustained volume increases to validate the bullish price action.

Dow Theory assessments align with the bullish narrative, showing mildly bullish signals on both weekly and monthly timeframes. This classical technical framework’s endorsement adds weight to the positive momentum, reinforcing the likelihood of a continued uptrend.

Comparative Returns and Market Context

Examining Bajaj Auto’s returns relative to the Sensex reveals a compelling long-term outperformance. Over the past 10 years, Bajaj Auto has delivered a staggering 308.66% return compared to the Sensex’s 245.70%. Similarly, over three and five-year horizons, the stock has outpaced the benchmark by wide margins, returning 149.08% and 126.41% respectively, versus the Sensex’s 37.63% and 66.63%.

In the short term, the stock’s one-month return is a modest 1.00%, outperforming the Sensex’s negative 2.36%, while the year-to-date gain of 2.70% contrasts favourably with the Sensex’s decline of 1.74%. However, the one-week return of 1.06% trails the Sensex’s 2.30%, indicating some recent relative underperformance amid broader market strength.

Valuation and Market Capitalisation

Bajaj Auto’s market capitalisation grade remains at 1, reflecting its status as a large-cap heavyweight within the automobile sector. The company’s strong fundamentals and consistent earnings growth underpin its valuation premium, which is justified by its leadership position and robust product portfolio.

The MarketsMOJO score of 74.0 and upgraded mojo grade from Hold to Buy as of 3 February 2026 further validate the stock’s improving technical and fundamental outlook. This upgrade signals increased confidence from analysts and quantitative models in the stock’s near-term prospects.

Outlook and Investor Considerations

With multiple technical indicators aligning to a bullish stance, Bajaj Auto appears well-positioned for further gains. The bullish MACD and moving averages, combined with supportive Bollinger Bands and Dow Theory signals, suggest that the stock’s upward momentum is sustainable in the near to medium term.

However, investors should remain cautious of the neutral RSI readings and the mildly bearish monthly KST, which could indicate potential pauses or corrections in the longer-term trend. Monitoring volume trends and broader market conditions will be crucial to confirm the durability of this bullish phase.

Given the stock’s strong historical outperformance relative to the Sensex and its recent mojo grade upgrade to Buy, Bajaj Auto remains an attractive proposition for investors seeking exposure to the automobile sector’s growth story with a blend of technical and fundamental strength.

Summary

Bajaj Auto Ltd.’s technical parameters have shifted decisively towards a bullish outlook, supported by key momentum and trend indicators. The stock’s price action near its 52-week high, combined with positive MACD and moving averages, signals renewed investor confidence. While some oscillators remain neutral, the overall technical and fundamental backdrop favours continued upside potential. Long-term outperformance against the Sensex and a recent upgrade in mojo grade to Buy further enhance the stock’s appeal for discerning investors.

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