Reliance Infrastructure Ltd Faces Intensified Bearish Momentum Amid Technical Deterioration

Technical Trend Shift: From Mildly Bearish to Bearish

Reliance Infrastructure’s technical trend has worsened, moving from a mildly bearish stance to a fully bearish one. This shift is underscored by the stock’s daily moving averages, which currently indicate a bearish trend. The stock closed at ₹127.65 on 2 Feb 2026, down 4.99% from the previous close of ₹134.35, marking a significant intraday drop and hitting its lowest price point in the past year.

The 52-week high of ₹425.00 contrasts starkly with the current price, highlighting a steep decline of approximately 70% over the year. This sharp fall is mirrored in the technical indicators, which collectively suggest sustained downward pressure.

MACD and Momentum Oscillators Confirm Bearish Sentiment

The Moving Average Convergence Divergence (MACD) indicator remains bearish on both weekly and monthly timeframes, signalling that the stock’s short-term momentum is weaker than its longer-term trend. The weekly MACD line is below the signal line, reinforcing the negative momentum, while the monthly MACD confirms this bearish bias, indicating that the downtrend is entrenched.

Meanwhile, the Relative Strength Index (RSI) on weekly and monthly charts shows no clear signal, hovering in a neutral zone. This suggests that while the stock is not yet oversold, it lacks the momentum to trigger a reversal. The absence of a strong RSI signal implies that the stock could continue to languish in its current downtrend without immediate relief.

Bollinger Bands and KST Point to Continued Downside

Bollinger Bands on both weekly and monthly charts are bearish, with the price hugging the lower band. This positioning often indicates strong selling pressure and a lack of buying interest. The stock’s price touching the lower band at ₹127.65 further emphasises the bearish momentum.

The Know Sure Thing (KST) indicator, a momentum oscillator, is bearish on the weekly chart and mildly bearish on the monthly chart. This mixed but predominantly negative signal suggests that while some longer-term momentum may be stabilising, the short-term outlook remains weak.

Additional Technical Signals: Dow Theory and OBV

Dow Theory assessments on weekly and monthly timeframes are mildly bearish, indicating that the stock’s primary trend is downward but not yet in a severe decline phase. The On-Balance Volume (OBV) indicator shows no clear trend on weekly or monthly charts, signalling a lack of conviction among traders in either direction. This absence of volume confirmation often precedes further price weakness.

Comparative Performance: Reliance Infrastructure vs Sensex

Reliance Infrastructure’s returns have significantly underperformed the Sensex across multiple time horizons. Over the past week, the stock declined by 9.72%, compared to a modest 1.00% drop in the Sensex. The one-month and year-to-date returns for the stock are both negative at -22.54%, while the Sensex posted declines of -4.67% and -5.28%, respectively.

Over the last year, Reliance Infrastructure’s return stands at a steep -49.18%, contrasting sharply with the Sensex’s positive 5.16%. Even over three years, the stock’s 7.27% gain pales in comparison to the Sensex’s robust 35.67% appreciation. Although the five-year return of 360.83% for Reliance Infrastructure outpaces the Sensex’s 74.40%, the recent decade-long performance is deeply negative at -72.82%, while the Sensex surged 224.57%.

Mojo Score and Ratings Reflect Weak Outlook

MarketsMOJO assigns Reliance Infrastructure a Mojo Score of 31.0, categorising it with a 'Sell' grade as of 31 Jan 2026. This represents an upgrade from a previous 'Strong Sell' rating, signalling a slight improvement but still a negative outlook. The Market Cap Grade is low at 3, reflecting the company’s diminished market valuation and investor confidence.

The downgrade in technical trend to bearish aligns with the Mojo Grade, reinforcing the recommendation to exercise caution. Investors should note that despite the slight rating improvement, the overall technical and fundamental backdrop remains unfavourable.

Industry and Sector Context

Operating within the Power industry and sector, Reliance Infrastructure faces sectoral headwinds amid fluctuating energy demand and regulatory challenges. The stock’s technical deterioration is consistent with broader sector volatility, though it has underperformed peers significantly. This underperformance may be attributed to company-specific issues, including operational challenges and market sentiment.

Price Action and Moving Averages

The daily moving averages are firmly bearish, with the stock trading below its short-term and long-term averages. This technical configuration suggests that any rallies are likely to encounter resistance, and the prevailing trend is downward. The lack of upward momentum in moving averages corroborates the bearish signals from MACD and Bollinger Bands.

Investor Implications and Outlook

Given the comprehensive bearish signals across multiple technical indicators, investors should approach Reliance Infrastructure with caution. The stock’s proximity to its 52-week low and weak momentum indicators suggest limited near-term upside. The absence of strong volume trends and neutral RSI readings imply that a sustained recovery is not imminent.

Long-term investors may consider the stock’s historical five-year outperformance, but the recent and medium-term trends caution against aggressive accumulation. Monitoring for a reversal in MACD or a breakout above moving averages would be prudent before considering fresh positions.

Summary

Reliance Infrastructure Ltd’s technical parameters have deteriorated, with a clear shift to bearish momentum across MACD, Bollinger Bands, moving averages, and KST indicators. The stock’s price decline to ₹127.65, its 52-week low, and underperformance relative to the Sensex highlight significant challenges. While the Mojo Grade has improved slightly from 'Strong Sell' to 'Sell', the overall outlook remains negative.

Investors should remain cautious and monitor for any signs of technical reversal before considering new positions. The current environment favours a defensive stance, with superior options available within the Power sector and broader market.

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