HFCL Ltd Technical Momentum Shifts Amid Bearish Sentiment

Current Price and Market Context

As of 5 Jan 2026, HFCL Ltd is trading at ₹67.77, down 1.63% from the previous close of ₹68.89. The stock’s intraday range has been relatively narrow, with a high of ₹69.19 and a low of ₹67.36. This price sits closer to the 52-week low of ₹60.73 than the 52-week high of ₹116.35, reflecting a significant depreciation over the past year.

Technical Trend Overview

The technical trend for HFCL has shifted from bearish to mildly bearish, indicating a slight easing of downward pressure but no definitive reversal. This nuanced change is reflected across multiple timeframes and indicators, which present a complex picture for traders and investors alike.

MACD Analysis

The Moving Average Convergence Divergence (MACD) remains bearish on both weekly and monthly charts. This persistent negative momentum suggests that the stock’s price trend is still dominated by sellers, with the MACD line below the signal line and histogram bars indicating continued downward pressure. The lack of a bullish crossover implies that any recovery may be tentative at best.

RSI Signals

The Relative Strength Index (RSI) presents a divergence in signals. On the weekly chart, the RSI shows no clear signal, hovering in a neutral zone that neither confirms oversold nor overbought conditions. Conversely, the monthly RSI is bullish, indicating that over a longer horizon, the stock may be gaining some upward momentum or at least stabilising from oversold levels. This divergence suggests that short-term traders should exercise caution, while longer-term investors might find some grounds for optimism.

Bollinger Bands and Moving Averages

Bollinger Bands on both weekly and monthly charts are mildly bearish, with the price trading near the lower band. This positioning often signals increased volatility and potential for a rebound, but also highlights the risk of further downside if the lower band is breached decisively. Daily moving averages reinforce the bearish outlook, with the stock price below key averages such as the 50-day and 200-day moving averages, indicating sustained selling pressure in the short term.

Other Technical Indicators

The Know Sure Thing (KST) indicator remains bearish on both weekly and monthly timeframes, supporting the view of continued negative momentum. Dow Theory assessments show a mildly bearish trend on the weekly chart and no clear trend on the monthly chart, reflecting uncertainty in the broader market context for HFCL. However, On-Balance Volume (OBV) is bullish on both weekly and monthly charts, suggesting that despite price weakness, accumulation by investors is occurring, which could provide a foundation for future price support.

Mojo Score and Grade Update

HFCL’s Mojo Score currently stands at 28.0, reflecting a Strong Sell rating, an upgrade in severity from the previous Sell grade assigned on 17 Nov 2025. This downgrade signals increased caution from MarketsMOJO analysts, who factor in the company’s technical and fundamental metrics. The Market Cap Grade is a low 3, indicating limited market capitalisation strength relative to peers in the Telecom - Equipment & Accessories sector.

Price Returns Compared to Sensex

Examining HFCL’s returns relative to the Sensex reveals a mixed performance. Over the past week, HFCL outperformed the Sensex with a 10.18% gain versus 0.85% for the benchmark, suggesting short-term resilience or technical bounce. However, over one month, the stock declined by 4.13% while the Sensex rose 0.73%, indicating recent weakness. Year-to-date returns are flat at 0.03%, trailing the Sensex’s 0.64% gain.

Longer-term performance is more concerning: HFCL has lost 40.81% over the past year compared to a 7.28% gain in the Sensex. Over three years, the stock is down 10.36% while the Sensex surged 40.21%. Despite this, HFCL has delivered impressive returns over five and ten years, with gains of 161.66% and 206.65% respectively, though these lag the Sensex’s 79.16% and 227.83% over the same periods.

Sector and Industry Context

Operating within the Telecom - Equipment & Accessories sector, HFCL faces competitive pressures and cyclical demand fluctuations. The sector’s capital-intensive nature and rapid technological evolution require companies to maintain robust innovation and operational efficiency. HFCL’s current technical signals and market cap grade suggest it is struggling to keep pace with sector leaders, which may explain the bearish momentum and cautious analyst stance.

Investor Takeaway

HFCL Ltd’s technical momentum shift to mildly bearish from a stronger bearish stance suggests a potential stabilisation phase, but the overall outlook remains cautious. The persistent bearish MACD and moving averages, combined with mixed RSI signals, indicate that the stock is yet to establish a clear recovery trend. The bullish OBV readings hint at underlying accumulation, which could support a future rebound if accompanied by positive fundamental developments.

Investors should weigh the stock’s recent underperformance against the broader market and sector trends. While short-term price action shows some resilience, the longer-term downtrend and low Mojo Score advise prudence. Monitoring key technical levels, such as the 50-day and 200-day moving averages, alongside volume trends, will be critical for assessing any meaningful change in momentum.

Given the availability of better-rated alternatives within the Telecom - Equipment & Accessories sector, investors may consider diversifying or switching to stocks with stronger technical and fundamental profiles until HFCL demonstrates a sustained turnaround.

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