Coforge Ltd Falls 6.46%: 6 Key Factors Driving the Weekly Decline

Feb 2: Upgrade to Buy Sparks Initial Optimism

Coforge Ltd began the week on a positive note with MarketsMOJO upgrading its rating from 'Hold' to 'Buy' on 1 February 2026. This upgrade was driven by strong fundamentals including a 27.04% CAGR in operating profits, a robust ROCE of 25.30%, and a conservative debt profile with a debt to EBITDA ratio of 0.28 times. The company’s recent quarterly results showed net sales of ₹4,188.10 crores and a 41.4% growth in profit before tax excluding other income.

Technically, the stock shifted from a sideways trend to a mildly bullish stance, supported by daily moving averages and monthly Bollinger Bands. Despite some mixed momentum indicators such as a bearish weekly MACD and neutral RSI, the upgrade reflected renewed investor confidence. On 2 February, the stock closed at Rs.1,669.50, up 1.03%, while the Sensex declined 1.03%, signalling early outperformance.

Feb 3: Strong Gap Up Reflects Positive Market Sentiment

Building on the upgrade momentum, Coforge opened with a significant gap up of 4.52% on 3 February, opening near Rs.1,740. The stock reached an intraday high of Rs.1,756, a 5.18% increase from the previous close, and closed the day at Rs.1,710.85, up 2.48%. This outpaced the Sensex’s 2.63% gain and the IT - Software sector’s 2.34% rise, highlighting strong buying interest.

Technical indicators showed the stock trading above its 5-day and 20-day moving averages, signalling short-term bullish momentum. However, longer-term averages remained overhead, suggesting potential resistance. The stock’s beta of 1.54 indicated amplified volatility relative to the market, which was evident in the sharp price movements during the day.

Feb 4: Sharp Decline Amid Heavy Selling and Open Interest Surge

The bullish momentum reversed sharply on 4 February as Coforge’s stock price plunged 5.66% to close at Rs.1,614.10, hitting an intraday low of Rs.1,596. This represented a 6.71% drop from the previous day’s close. The stock traded below all key moving averages, signalling a weakening trend and increased selling pressure.

Notably, open interest in the derivatives segment surged by 21.96% to 55,797 contracts despite the price decline, suggesting increased speculative activity and possible fresh short positions. The futures segment alone accounted for a notional value of approximately ₹95,457 lakhs, while options volume was substantial at ₹48,949.6 crores. This divergence between rising open interest and falling price indicates complex market positioning amid a sector downturn, with the IT - Software sector falling 5.53% that day.

The Sensex, in contrast, closed marginally higher by 0.04%, underscoring that Coforge’s weakness was stock-specific rather than market-driven.

Feb 5: Technical Momentum Shifts to Mildly Bearish

On 5 February, Coforge’s technical momentum deteriorated further as the stock closed at Rs.1,600.15, down 0.86%. The previous day’s sharp fall and ongoing volatility contributed to a shift from mildly bullish to mildly bearish technical indicators. The MACD was bearish on weekly and monthly charts, Bollinger Bands turned bearish, and the KST oscillator showed mild bearishness.

Despite this, daily moving averages remained mildly bullish, indicating some short-term support. The RSI remained neutral, suggesting the stock was neither overbought nor oversold. On-Balance Volume showed no clear trend, implying that recent declines lacked strong volume confirmation.

These mixed signals reflect a complex technical picture amid broader market volatility and sector-specific challenges.

Feb 6: Week Ends Lower Amid Continued Selling Pressure

The week concluded on 6 February with Coforge’s stock closing at Rs.1,545.80, down 3.40% on the day and marking a 6.46% decline for the week. The stock’s volume increased to 81,548 shares, reflecting sustained investor activity amid the price drop. The Sensex closed slightly higher by 0.10%, further emphasising Coforge’s underperformance.

The stock’s technical indicators remain cautious, with the price trading below key moving averages and momentum oscillators signalling bearish or neutral trends. The 52-week high of Rs.1,994.00 remains distant, while the 52-week low of Rs.1,190.84 provides a lower support boundary. Coforge’s long-term returns remain impressive, but near-term volatility and mixed signals suggest a period of consolidation or correction.

Key Takeaways

Positive Signals: The MarketsMOJO upgrade to a Buy rating on 1 February 2026 was supported by strong fundamentals including robust operating profit growth, high ROCE, and conservative leverage. The initial days of the week saw the stock outperform the Sensex and sector indices, reflecting renewed investor confidence. Long-term returns remain exceptional, with five-year gains of 244.98% far exceeding the Sensex’s 74.40%.

Cautionary Signals: Despite early optimism, the stock faced significant selling pressure midweek, with a sharp decline on 4 February accompanied by a surge in derivatives open interest, signalling increased speculative activity and possible short positioning. Technical momentum shifted from mildly bullish to mildly bearish, with the stock trading below all key moving averages by week’s end. The divergence between rising open interest and falling price suggests uncertainty and potential volatility ahead.

Investors should note the stock’s premium valuation metrics, including a P/B ratio of 8.1, which may limit upside in the near term. Mixed technical indicators and sector headwinds further counsel prudence despite the fundamental upgrade.

Conclusion

Coforge Ltd’s week was marked by a strong fundamental upgrade and initial price gains, followed by a pronounced reversal amid technical weakness and increased speculative activity. The stock’s 6.46% weekly decline contrasts with the Sensex’s 1.51% gain, underscoring its relative underperformance. While the company’s solid financials and long-term growth record remain intact, the near-term outlook is clouded by mixed technical signals and heightened volatility.

Market participants should closely monitor key technical levels and open interest trends to gauge the stock’s directional bias in the coming sessions. The balance between strong fundamentals and technical caution will likely define Coforge’s price action in the near term.

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