Rajapalayam Mills Ltd Shows Mixed Technical Signals Amid Mild Momentum Shift

Technical Trend and Momentum Overview

Rajapalayam Mills has transitioned from a strongly bearish technical trend to a mildly bearish one, indicating a slight easing of downward pressure. The stock closed at ₹820.00 on 1 Feb 2026, up 2.65% from the previous close of ₹798.80, with intraday highs reaching ₹822.00 and lows at ₹795.05. Despite this uptick, the stock remains well below its 52-week high of ₹1,058.00, and only modestly above its 52-week low of ₹750.05.

The daily moving averages continue to reflect a mildly bearish stance, suggesting that while short-term momentum has improved, the overall trend remains cautious. This is corroborated by the Bollinger Bands on both weekly and monthly charts, which remain mildly bearish, indicating that price volatility is still skewed towards the downside.

MACD and RSI Signals

The Moving Average Convergence Divergence (MACD) indicator presents a nuanced picture. On a weekly basis, the MACD is mildly bullish, signalling some positive momentum building up in the short term. However, the monthly MACD remains bearish, implying that the longer-term trend has yet to confirm a sustained recovery. This divergence between weekly and monthly MACD readings suggests that while short-term traders might find opportunities, long-term investors should remain cautious.

The Relative Strength Index (RSI) on both weekly and monthly charts currently shows no clear signal, hovering in neutral territory. This lack of directional momentum in RSI indicates that the stock is neither overbought nor oversold, which aligns with the mixed technical signals observed elsewhere.

Other Technical Indicators: KST, Dow Theory, and OBV

The Know Sure Thing (KST) indicator remains bearish on both weekly and monthly timeframes, reinforcing the notion that the stock’s momentum is still under pressure. Dow Theory analysis reveals no clear trend on the weekly chart, while the monthly chart is mildly bearish, further underscoring the cautious outlook.

On-Balance Volume (OBV) data is currently unavailable, limiting the ability to assess volume-driven momentum conclusively. However, the existing indicators collectively suggest that while some short-term improvement is evident, the stock has yet to break decisively from its bearish undercurrents.

Price Performance Relative to Sensex

Examining Rajapalayam Mills’ returns relative to the benchmark Sensex reveals a mixed performance over various time horizons. Over the past week, the stock outperformed the Sensex with a 3.22% gain compared to the index’s 0.90%. However, over the last month, the stock declined by 1.09%, though this was less severe than the Sensex’s 2.84% drop. Year-to-date, Rajapalayam Mills has marginally gained 0.21%, while the Sensex has fallen 3.46%.

Longer-term returns tell a more sobering story. Over the past year, the stock has declined 18.33%, significantly underperforming the Sensex’s 7.18% gain. Over three and five years, the stock’s cumulative returns of 23.70% and 12.42% lag behind the Sensex’s 38.27% and 77.74%, respectively. Even over a decade, Rajapalayam Mills’ 125.83% gain trails the Sensex’s 230.79%.

This relative underperformance highlights the challenges the company faces in regaining investor confidence and market leadership within the Garments & Apparels sector.

Mojo Score and Ratings Update

MarketsMOJO’s latest assessment assigns Rajapalayam Mills a Mojo Score of 37.0, categorising it as a Sell. This represents an upgrade from the previous Strong Sell rating issued on 1 Jan 2026, signalling a modest improvement in the company’s outlook. The Market Cap Grade stands at 4, reflecting a mid-tier valuation relative to peers.

While the upgrade from Strong Sell to Sell indicates some positive momentum, the overall score remains low, suggesting that significant risks persist. Investors should consider this rating in conjunction with the mixed technical signals and the company’s relative underperformance.

Sector and Industry Context

Rajapalayam Mills operates within the Garments & Apparels industry, a sector currently facing headwinds from fluctuating raw material costs and shifting consumer demand patterns. The sector’s performance has been volatile, with many companies struggling to maintain margins amid rising input prices and global supply chain disruptions.

In this context, Rajapalayam Mills’ technical indicators and price momentum reflect broader sectoral challenges. The mildly bearish trend and cautious technical signals suggest that the stock is still grappling with these external pressures, despite some short-term improvements.

Investor Takeaway and Outlook

Rajapalayam Mills Ltd’s recent technical developments suggest a tentative shift from a strongly bearish to a mildly bearish trend, with some short-term bullish signals emerging in the weekly MACD and a modest price gain of 2.65% on 1 Feb 2026. However, the absence of clear RSI signals and persistent bearishness in longer-term indicators such as the monthly MACD and KST temper enthusiasm.

Investors should note the stock’s relative underperformance against the Sensex over longer periods, which underscores the need for cautious optimism. The upgrade in Mojo Grade from Strong Sell to Sell reflects this nuanced outlook, signalling that while conditions may be improving, significant risks remain.

Given the mixed technical signals and sectoral headwinds, a prudent approach would be to monitor further confirmation of trend reversals before committing to sizeable positions. Short-term traders might capitalise on the mildly bullish weekly MACD, but long-term investors should await clearer signs of sustained momentum improvement.

Overall, Rajapalayam Mills remains a stock under watch, with its technical parameters indicating a complex interplay of recovery attempts and lingering bearish pressures.

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