HFCL Ltd Faces Bearish Momentum Amid Technical Downturn and Market Pressure

Price Momentum and Recent Market Performance

HFCL’s current market price stands at ₹66.30, down from the previous close of ₹67.91, reflecting a daily decline of 2.37%. The stock’s intraday range on 20 Jan 2026 was between ₹65.66 and ₹68.68, indicating some volatility but a clear downward bias. Over the past 52 weeks, HFCL has traded between ₹60.73 and ₹106.90, with the current price closer to the lower end of this range, underscoring the pressure on the stock.

When compared with the broader market, HFCL’s returns have been mixed. The stock outperformed the Sensex over the short term, with a 1-week return of +4.79% versus Sensex’s -0.75%, and a 1-month gain of +3.32% against Sensex’s -1.98%. However, year-to-date, HFCL has declined by 2.14%, slightly better than the Sensex’s 2.32% fall. The longer-term picture is less favourable, with a 1-year return of -36.07% compared to Sensex’s +8.65%, and a 3-year return of -7.66% versus Sensex’s robust +36.79%. Over 5 and 10 years, HFCL has outperformed the Sensex, delivering 101.83% and 233.17% returns respectively, highlighting its historical growth but recent struggles.

Technical Indicators Signal Bearish Shift

The technical trend for HFCL has shifted from mildly bearish to outright bearish, reflecting increased selling pressure and weakening momentum. The Moving Average Convergence Divergence (MACD) indicator is bearish on both weekly and monthly timeframes, signalling that the stock’s short-term momentum is lagging behind its longer-term trend. This bearish MACD alignment often precedes further downside or consolidation phases.

The Relative Strength Index (RSI) presents a nuanced picture. While the weekly RSI shows no clear signal, the monthly RSI is bullish, suggesting some underlying strength or potential for a longer-term rebound. However, this bullish monthly RSI is overshadowed by other negative indicators.

Bollinger Bands on both weekly and monthly charts are bearish, indicating that the stock price is trading near the lower band and volatility remains elevated. This often points to sustained downward pressure or a potential oversold condition that has yet to trigger a reversal.

Daily moving averages are firmly bearish, with the stock price trading below key averages such as the 50-day and 200-day moving averages. This confirms the prevailing downtrend and suggests resistance at higher levels.

Additional Technical Signals and Volume Analysis

The Know Sure Thing (KST) indicator, a momentum oscillator, is bearish on both weekly and monthly timeframes, reinforcing the negative momentum outlook. Dow Theory analysis shows no clear trend on weekly or monthly charts, indicating indecision or a lack of strong directional conviction among investors.

On-Balance Volume (OBV) analysis is mixed: weekly OBV shows no trend, but monthly OBV is bullish. This divergence suggests that while short-term volume flow is neutral, longer-term accumulation might be occurring. However, this has not yet translated into price strength.

Mojo Grade Downgrade Reflects Technical Weakness

MarketsMOJO has downgraded HFCL’s Mojo Grade from Sell to Strong Sell as of 17 Nov 2025, reflecting the deteriorating technical and momentum indicators. The current Mojo Score stands at 23.0, signalling a weak outlook. The Market Cap Grade is 3, indicating a mid-tier market capitalisation relative to peers in the Telecom Equipment & Accessories sector.

This downgrade is consistent with the bearish signals from MACD, moving averages, Bollinger Bands, and KST. The combination of these factors suggests that investors should exercise caution and consider the risk of further downside in the near term.

Sector and Industry Context

HFCL operates within the Telecom Equipment & Accessories industry, a sector that has faced headwinds due to global supply chain disruptions and competitive pressures. While the broader telecom sector has shown pockets of resilience, HFCL’s technical indicators suggest it is lagging behind peers. The stock’s recent underperformance relative to the Sensex over the 1-year and 3-year periods highlights these challenges.

Investors should weigh HFCL’s historical outperformance over the 5- and 10-year horizons against its current technical weakness and sector dynamics. The mixed signals from volume and momentum indicators imply that a turnaround is not imminent, and the stock may remain under pressure until clearer bullish signals emerge.

Investor Takeaway and Outlook

HFCL Ltd’s current technical profile suggests caution for investors. The bearish alignment of key momentum indicators such as MACD, KST, and moving averages, combined with the downgrade to a Strong Sell Mojo Grade, points to a challenging near-term outlook. While monthly RSI and OBV offer some hope of longer-term support, these have yet to translate into price strength.

Given the stock’s proximity to its 52-week low and the absence of a clear trend in Dow Theory analysis, investors should monitor for confirmation of a reversal before considering new positions. Those holding the stock may want to reassess their exposure in light of the technical deterioration and sector headwinds.

In summary, HFCL’s technical momentum has shifted decisively towards bearishness, reflecting broader market pressures and company-specific challenges. A cautious approach is warranted until more robust bullish signals emerge from the technical indicators.

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