Mphasis Ltd. Technical Momentum Shifts Amid Bearish Signals

Technical Trend Shift and Price Movement

The technical trend for Mphasis has deteriorated from mildly bearish to outright bearish, reflecting growing downside pressure. The stock closed at ₹2,306.00 on 24 Feb 2026, down 2.85% from the previous close of ₹2,373.55. Intraday volatility saw a high of ₹2,352.05 and a low of ₹2,294.50, underscoring the stock’s struggle to maintain upward momentum.

Over the past week, Mphasis has declined by 6.34%, starkly underperforming the Sensex, which was flat with a marginal 0.02% gain. The one-month return paints an even bleaker picture, with the stock down 16.15% compared to the Sensex’s 2.15% rise. Year-to-date, Mphasis has lost 17.37%, while the Sensex has declined by only 2.26%. This divergence highlights the stock’s vulnerability amid broader market resilience.

MACD and Momentum Indicators

The Moving Average Convergence Divergence (MACD) indicator remains bearish on the weekly chart and mildly bearish on the monthly chart. This suggests that the stock’s momentum is weakening, with the shorter-term trend showing more pronounced negative signals. The bearish weekly MACD indicates that selling pressure has intensified recently, while the monthly mild bearishness points to a longer-term downtrend that is still developing.

Complementing this, the Know Sure Thing (KST) oscillator also signals bearish momentum on the weekly timeframe and mildly bearish on the monthly, reinforcing the view that the stock is under technical strain. These momentum oscillators are critical for traders to gauge the strength and sustainability of price moves, and their current readings for Mphasis suggest caution.

RSI and Bollinger Bands Analysis

The Relative Strength Index (RSI) on both weekly and monthly charts currently shows no clear signal, hovering in neutral territory. This indicates that the stock is neither oversold nor overbought, but the absence of bullish RSI divergence means there is limited technical support for a near-term rebound.

Bollinger Bands, however, present a more bearish outlook. Both weekly and monthly Bollinger Bands are signalling bearish conditions, with the stock price trending towards the lower band. This typically reflects increased volatility and downward pressure, suggesting that the stock could continue to test lower support levels.

Moving Averages and Volume Trends

Daily moving averages for Mphasis are firmly bearish, with the stock trading below its key short-term and medium-term averages. This technical positioning often acts as resistance, limiting upside potential until a clear breakout occurs. The On-Balance Volume (OBV) indicator shows no definitive trend on the weekly chart and a mildly bearish stance on the monthly chart, suggesting that volume flows are not supporting a sustained rally.

Such volume and moving average dynamics typically indicate that institutional investors may be reducing exposure or that buying interest is insufficient to reverse the downtrend.

Dow Theory and Broader Market Context

Interestingly, Dow Theory readings are mixed. The weekly chart shows a mildly bullish signal, hinting at some underlying strength or potential for a short-term recovery. However, the monthly chart remains mildly bearish, aligning with the broader technical deterioration. This divergence suggests that while some traders may anticipate a bounce, the longer-term trend remains under pressure.

Comparing Mphasis’s returns with the Sensex over various timeframes further contextualises the stock’s performance challenges. Over one year, Mphasis has declined 10.03%, whereas the Sensex gained 10.60%. Even over three and five years, the stock’s returns of 5.68% and 31.87% lag the Sensex’s 39.74% and 67.42%, respectively. Despite a strong 10-year return of 432.19% versus the Sensex’s 255.80%, recent trends suggest the stock is losing its relative strength.

Mojo Score and Analyst Ratings

Mphasis currently holds a Mojo Score of 38.0, categorised as a Sell rating, a downgrade from its previous Hold grade as of 1 Feb 2026. This downgrade reflects the accumulation of bearish technical signals and the stock’s underperformance relative to its sector and benchmark indices. The Market Cap Grade stands at 2, indicating a relatively modest market capitalisation compared to peers, which may limit liquidity and institutional interest.

Given the technical deterioration and the downgrade, investors should approach Mphasis with caution. The combination of bearish MACD, moving averages, and Bollinger Bands suggests that the stock could face further downside pressure in the near term unless there is a significant shift in fundamentals or market sentiment.

Investment Implications and Outlook

For investors, the current technical landscape for Mphasis signals a need for prudence. The stock’s failure to keep pace with the Sensex and the Computers - Software & Consulting sector raises questions about its ability to regain momentum soon. While the long-term fundamentals of the company may remain intact, the technical indicators warn of potential short- to medium-term weakness.

Traders relying on momentum and trend-following strategies may consider reducing exposure or waiting for clearer bullish signals such as a MACD crossover, RSI improvement, or a break above key moving averages. Conversely, value investors might monitor for oversold conditions or fundamental catalysts that could trigger a reversal.

Summary

Mphasis Ltd. is currently navigating a challenging technical environment marked by bearish momentum across multiple indicators. The stock’s recent price action and technical signals suggest a continuation of downward pressure, with limited signs of immediate recovery. The downgrade to a Sell rating by MarketsMOJO underscores this cautious stance. Investors should weigh these technical factors alongside fundamental analysis before making portfolio decisions.

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