HFCL Ltd Technical Momentum Shifts Amid Bearish Market Signals

Current Price and Market Context

As of 14 Jan 2026, HFCL Ltd is trading at ₹62.72, down 0.87% from the previous close of ₹63.27. The stock’s 52-week high stands at ₹106.90, while the 52-week low is ₹60.73, indicating a significant retracement from its peak. Today’s intraday range has been between ₹61.70 and ₹65.00, reflecting moderate volatility within a bearish framework.

Technical Trend Overview

MarketsMOJO’s latest assessment reveals a shift in HFCL’s technical trend from outright bearish to mildly bearish. This subtle change suggests that while the downtrend remains dominant, some stabilising forces may be emerging. The daily moving averages continue to signal bearish momentum, with the stock price trading below key averages, reinforcing downward pressure.

MACD and Momentum Indicators

The Moving Average Convergence Divergence (MACD) indicator remains bearish on both weekly and monthly timeframes, signalling persistent negative momentum. The MACD line continues to stay below the signal line, and histogram values remain in negative territory, underscoring the lack of upward momentum in the medium to long term.

RSI Signals and Divergences

The Relative Strength Index (RSI) presents a mixed picture. On the weekly chart, RSI offers no clear signal, hovering near neutral levels without indicating overbought or oversold conditions. However, the monthly RSI has turned bullish, suggesting that longer-term selling pressure may be easing and that the stock could be approaching a potential recovery phase if other indicators align.

Bollinger Bands and Volatility

Bollinger Bands remain bearish on both weekly and monthly charts, with the stock price frequently touching or breaching the lower band. This pattern indicates sustained volatility and downward pressure, although the bands’ contraction in recent weeks hints at a possible reduction in price swings, which could precede a consolidation or reversal.

Other Technical Indicators

The Know Sure Thing (KST) oscillator remains bearish across weekly and monthly periods, reinforcing the prevailing negative momentum. Conversely, the On-Balance Volume (OBV) indicator is bullish on both timeframes, signalling that despite price declines, buying volume is increasing. This divergence between price and volume could be an early sign of accumulation by informed investors.

Dow Theory and Moving Averages

According to Dow Theory, the weekly trend is mildly bullish, suggesting some optimism in the short term, while the monthly trend shows no definitive direction. Daily moving averages, however, continue to exert bearish influence, with the stock price consistently below the 50-day and 200-day averages, indicating that the broader downtrend remains intact.

Comparative Performance Against Sensex

HFCL’s recent returns have lagged the benchmark Sensex significantly. Over the past week, the stock declined by 9.56%, compared to Sensex’s modest 1.69% drop. The one-month and year-to-date returns also show underperformance, with HFCL down 5.77% and 7.42% respectively, while Sensex fell by 1.92% and 1.87%. Over longer horizons, HFCL’s one-year return is deeply negative at -32.70%, contrasting with Sensex’s 9.56% gain. Even over three years, HFCL trails with a -14.78% return versus Sensex’s 38.78%. However, the stock has outperformed over five years with a 96.92% gain, though it remains behind Sensex’s 68.97% over ten years.

Mojo Score and Rating Update

MarketsMOJO has downgraded HFCL Ltd’s Mojo Grade from Sell to Strong Sell as of 17 Nov 2025, reflecting deteriorating fundamentals and technical outlook. The current Mojo Score stands at 28.0, indicating weak overall quality and momentum. The Market Cap Grade is rated 3, suggesting moderate market capitalisation but insufficient to offset the negative technical and fundamental signals.

Implications for Investors

The mixed technical signals present a challenging environment for investors. The persistent bearishness in MACD, moving averages, and Bollinger Bands suggests caution, while bullish OBV readings and monthly RSI hint at potential accumulation and a nascent recovery. The mildly bullish Dow Theory weekly signal further complicates the outlook, indicating that short-term rallies may occur within a broader downtrend.

Sector and Industry Context

HFCL operates within the Telecom - Equipment & Accessories sector, which has faced headwinds due to global supply chain disruptions and competitive pressures. The sector’s technical indicators broadly mirror HFCL’s challenges, with many peers also exhibiting bearish momentum. Investors should weigh HFCL’s individual technical profile against sector trends before making allocation decisions.

Technical Outlook and Conclusion

In summary, HFCL Ltd’s technical parameters reveal a stock caught between entrenched bearish momentum and early signs of potential recovery. The weekly and monthly MACD and KST oscillators remain firmly bearish, while the daily moving averages reinforce downward pressure. However, bullish OBV readings and a monthly RSI uptick suggest that some investors may be accumulating shares at current levels, possibly anticipating a turnaround.

Given the stock’s significant underperformance relative to the Sensex over recent periods, investors should exercise caution and closely monitor technical developments. A sustained break above key moving averages and confirmation of bullish momentum in MACD and RSI would be necessary to signal a meaningful trend reversal. Until then, the Strong Sell rating and low Mojo Score reflect the prevailing risks.

For those considering exposure to the Telecom - Equipment & Accessories sector, it is prudent to evaluate HFCL’s technical and fundamental profile alongside alternative opportunities that may offer stronger momentum and quality metrics.

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