HFCL Ltd Shows Mixed Technical Signals Amid Mild Momentum Shift

Current Price Action and Market Context

Trading at ₹68.27 as of 4 February 2026, HFCL Ltd has rebounded from its previous close of ₹66.38, reaching an intraday high of ₹70.12 and a low of ₹67.38. The stock remains well below its 52-week high of ₹105.10 but comfortably above the 52-week low of ₹59.83, indicating a recovery phase after a period of volatility. The 2.85% day change reflects renewed buying interest, possibly driven by technical repositioning.

Technical Trend Evolution

HFCL’s technical trend has transitioned from outright bearish to mildly bearish, signalling a tentative improvement in price momentum. This shift is underpinned by a divergence in indicator readings across different timeframes, which merits a detailed examination.

MACD Analysis

The Moving Average Convergence Divergence (MACD) indicator presents a nuanced picture. On the weekly chart, the MACD is mildly bullish, suggesting that short-term momentum is gaining strength. However, the monthly MACD remains bearish, indicating that the longer-term trend has yet to confirm a sustained uptrend. This divergence implies that while short-term traders may find opportunities, longer-term investors should remain cautious until monthly momentum improves.

RSI Signals

The Relative Strength Index (RSI) offers further insight. The weekly RSI currently shows no definitive signal, hovering in a neutral zone that neither indicates overbought nor oversold conditions. Conversely, the monthly RSI is bullish, hinting at underlying strength building over a longer horizon. This bullish monthly RSI aligns with the mildly bullish weekly MACD, reinforcing the possibility of a gradual momentum shift.

Moving Averages and Bollinger Bands

Daily moving averages remain mildly bearish, reflecting that the stock price is still below key short-term averages, which act as resistance levels. Meanwhile, Bollinger Bands on both weekly and monthly charts are bearish, signalling that price volatility remains skewed towards downside risk. The contraction or expansion of these bands will be critical to watch for potential breakout or breakdown scenarios.

Other Momentum Indicators

The Know Sure Thing (KST) indicator is bearish on both weekly and monthly timeframes, suggesting that momentum remains subdued despite recent gains. However, the On-Balance Volume (OBV) indicator is bullish across weekly and monthly charts, indicating that volume trends support price advances. This volume-price relationship is a positive sign, as it suggests accumulation by market participants.

Dow Theory and Market Sentiment

According to Dow Theory, the weekly trend is mildly bullish, while the monthly trend shows no clear direction. This mixed reading reflects the broader market uncertainty surrounding HFCL, with short-term optimism tempered by longer-term caution.

Comparative Returns and Sector Context

HFCL’s recent returns reveal a mixed performance relative to the broader Sensex index. Over the past week, the stock surged 11.88%, significantly outperforming the Sensex’s 2.30% gain. However, over the one-month and year-to-date periods, HFCL’s returns were modest at 0.74% and 0.77% respectively, while the Sensex declined by 2.36% and 1.74%. The one-year return remains deeply negative at -32.77%, contrasting with the Sensex’s robust 8.49% gain, reflecting past challenges for HFCL.

Longer-term returns tell a more encouraging story. Over five and ten years, HFCL has delivered 142.95% and 276.14% returns respectively, outpacing the Sensex’s 66.63% and 245.70% gains. This suggests that despite recent setbacks, HFCL has demonstrated resilience and growth potential over extended periods, consistent with its industry positioning in Telecom - Equipment & Accessories.

Mojo Score and Ratings Update

MarketsMOJO assigns HFCL a Mojo Score of 37.0, with a current Mojo Grade of Sell, upgraded from a previous Strong Sell rating on 17 November 2025. This upgrade reflects a slight improvement in technical and fundamental parameters, though the overall sentiment remains cautious. The Market Cap Grade stands at 3, indicating a mid-tier market capitalisation relative to peers.

Investment Implications and Outlook

Investors should weigh the mixed technical signals carefully. The mildly bullish weekly MACD and bullish monthly RSI, combined with positive OBV trends, suggest that accumulation is underway and short-term momentum could improve. However, bearish KST readings, daily moving averages, and Bollinger Bands caution against premature optimism.

Given the stock’s recent outperformance relative to the Sensex in the short term, traders might consider tactical positions to capitalise on momentum shifts. Long-term investors should monitor monthly indicators and fundamental developments closely before committing additional capital.

Conclusion: Navigating a Cautious Recovery

HFCL Ltd’s technical landscape is evolving, with early signs of momentum improvement tempered by persistent bearish elements. The stock’s recent price gains and volume support are encouraging, yet the longer-term monthly indicators urge prudence. Investors should consider HFCL’s position within the Telecom - Equipment & Accessories sector, its historical return profile, and the current mixed technical signals before making investment decisions.

As the stock attempts to consolidate gains and potentially break out of its recent trading range, monitoring key technical levels and indicator confirmations will be essential. The upgrade from Strong Sell to Sell by MarketsMOJO reflects this nuanced outlook, signalling that while risks remain, opportunities for measured gains exist.

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