HFCL Ltd Faces Bearish Momentum Amid Technical Downgrade and Market Pressure

Price Movement and Market Context

HFCL Ltd’s current price of ₹65.81 is down from the previous close of ₹68.57, marking a significant intraday drop. The stock traded within a range of ₹65.20 to ₹69.86 during the session, remaining closer to its 52-week low of ₹59.83 than its high of ₹106.90. This price action underscores the prevailing bearish sentiment in the near term.

Comparatively, HFCL’s returns have been underwhelming against the broader Sensex benchmark. Over the past year, the stock has declined by 30.8%, while the Sensex gained 5.16%. Even on a year-to-date basis, HFCL is down 2.86% versus the Sensex’s 5.28% loss, indicating relative underperformance. However, the company’s longer-term returns remain impressive, with a five-year gain of 127.32% outpacing the Sensex’s 74.40%, and a ten-year return of 216.39% closely tracking the Sensex’s 224.57%.

Technical Trend Shift: From Mildly Bearish to Bearish

Recent technical analysis reveals a deterioration in HFCL’s momentum. The overall technical trend has shifted from mildly bearish to outright bearish, signalling increased downside risk. This shift is corroborated by several key indicators:

• Moving Averages (Daily): The daily moving averages remain bearish, with the stock trading below its short- and medium-term averages, indicating sustained selling pressure.
• Bollinger Bands (Weekly & Monthly): Both weekly and monthly Bollinger Bands are bearish, suggesting the stock price is trending towards the lower band, a sign of increased volatility and downward momentum.
• KST (Know Sure Thing) Indicator: Both weekly and monthly KST readings are bearish, reinforcing the negative momentum across multiple timeframes.

Mixed Signals from MACD and RSI

The Moving Average Convergence Divergence (MACD) indicator presents a nuanced picture. On a weekly basis, the MACD remains mildly bullish, hinting at some underlying positive momentum. However, the monthly MACD is bearish, reflecting longer-term weakness. This divergence suggests that while short-term traders might find some buying opportunities, the broader trend remains unfavourable.

The Relative Strength Index (RSI) also offers mixed signals. The weekly RSI is neutral, providing no clear directional bias, whereas the monthly RSI is bullish, indicating that the stock may be oversold on a longer timeframe and could be due for a rebound. Nevertheless, this potential upside is tempered by the prevailing bearish trend in other indicators.

Additional Technical Indicators and Market Sentiment

The Dow Theory readings add further complexity. Weekly data shows a mildly bullish stance, suggesting some short-term optimism among market participants. However, the monthly Dow Theory indicates no clear trend, reflecting uncertainty over the longer horizon.

On-Balance Volume (OBV) metrics for both weekly and monthly periods show no discernible trend, implying that volume flows are not strongly supporting either buying or selling pressure at present. This lack of volume confirmation often signals caution for traders relying on momentum.

Mojo Score and Market Capitalisation Insights

HFCL’s MarketsMOJO score currently stands at 23.0, categorised as a Strong Sell, a downgrade from its previous Sell rating on 17 Nov 2025. This downgrade reflects the deteriorating technical and fundamental outlook. The company’s market capitalisation grade is a low 3, indicating limited market cap strength relative to peers in the telecom equipment sector.

Such a rating suggests that investors should exercise caution, as the stock faces headwinds from both technical and fundamental perspectives.

Investment Implications and Outlook

Investors analysing HFCL Ltd should weigh the mixed technical signals carefully. The prevailing bearish momentum, confirmed by daily moving averages and monthly MACD, suggests that the stock may face further downside pressure in the near term. The recent 4.03% drop and proximity to the 52-week low reinforce this cautious stance.

However, the mildly bullish weekly MACD and monthly RSI hint at potential oversold conditions that could trigger a technical rebound. This is supported by the stock’s strong long-term performance, with five- and ten-year returns significantly outperforming the Sensex.

Given the MarketsMOJO Strong Sell rating and the downgrade from Sell, the consensus leans towards a cautious or defensive approach. Traders might consider waiting for clearer confirmation of trend reversal before initiating fresh positions. Meanwhile, long-term investors should monitor fundamental developments alongside technical indicators to assess the stock’s recovery potential.

In summary, HFCL Ltd’s technical landscape is characterised by a bearish momentum shift, tempered by some bullish signals on longer timeframes. This complex interplay calls for a balanced and vigilant investment strategy amid ongoing market volatility.

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