Sasken Technologies Ltd Faces Bearish Momentum Amid Mixed Technical Signals

Technical Momentum and Indicator Analysis

The stock’s current price stands at ₹1,344.30, slightly below yesterday’s close of ₹1,347.90, reflecting a minor day change of -0.27%. The 52-week trading range remains wide, with a high of ₹2,080.00 and a low of ₹1,155.00, indicating significant volatility over the past year. Recent price action suggests a weakening momentum as the stock struggles to reclaim higher levels.

Examining the Moving Averages on a daily timeframe reveals a bearish trend, with the stock trading below key averages, signalling downward pressure. This aligns with the broader technical trend change from mildly bearish to bearish, underscoring a shift in investor sentiment.

The weekly MACD remains mildly bullish, suggesting some short-term positive momentum; however, this is counterbalanced by the monthly MACD which is mildly bearish, indicating longer-term caution. The divergence between weekly and monthly MACD readings highlights the stock’s current indecision and potential for volatility.

Relative Strength Index (RSI) readings further reinforce this mixed picture. The weekly RSI is bearish, pointing to weakening buying interest in the near term, while the monthly RSI shows no clear signal, reflecting a neutral stance over a longer horizon. This lack of monthly RSI confirmation suggests that the stock may not yet be oversold or overbought, leaving room for further downside or consolidation.

Bollinger Bands and Other Momentum Indicators

Bollinger Bands on both weekly and monthly charts are bearish, indicating that the stock price is trending towards the lower band, a sign of increased selling pressure and potential continuation of the downtrend. This technical setup often precedes further declines unless a strong reversal catalyst emerges.

The Know Sure Thing (KST) indicator presents a nuanced view: weekly readings are mildly bullish, suggesting some short-term positive momentum, but monthly KST remains bearish, reinforcing the longer-term downtrend. This divergence between timeframes is a cautionary signal for traders relying on momentum oscillators.

Dow Theory analysis shows a mildly bearish trend on the weekly scale, with no clear trend on the monthly timeframe. This lack of monthly directional confirmation adds to the uncertainty surrounding the stock’s medium-term outlook.

On-Balance Volume (OBV) indicators show no discernible trend on either weekly or monthly charts, implying that volume is not currently supporting a strong directional move. This absence of volume confirmation often precedes sideways price action or increased volatility.

Comparative Performance and Market Context

When compared with the broader Sensex index, Sasken Technologies’ returns paint a mixed picture. Over the past week, the stock has underperformed significantly, declining by 4.94% against the Sensex’s modest 0.75% fall. However, over the last month, Sasken outperformed with a 13.63% gain while the Sensex declined by 1.98%, reflecting episodic strength.

Year-to-date, the stock has fallen 11.18%, considerably worse than the Sensex’s 2.32% decline, signalling recent weakness. Over the last year, Sasken’s performance has been notably poor, down 33.71%, while the Sensex gained 8.65%, highlighting sector-specific or company-specific challenges.

Longer-term returns are more encouraging, with Sasken delivering 45.52% over three years and 58.73% over five years, though these lag the Sensex’s respective 36.79% and 68.52% gains. Impressively, over a decade, Sasken has outperformed the Sensex with a 284.64% return compared to 240.06%, underscoring its potential as a long-term investment despite recent volatility.

Mojo Score and Ratings Update

MarketsMOJO’s latest assessment downgraded Sasken Technologies Ltd from a Hold to a Sell rating on 28 February 2025, reflecting deteriorating technical and fundamental conditions. The current Mojo Score stands at 36.0, firmly in the Sell category, signalling caution for investors. The Market Cap Grade is a low 3, indicating limited market capitalisation strength relative to peers.

This downgrade aligns with the bearish technical trend and mixed momentum indicators, suggesting that the stock may face further headwinds in the near term. Investors should weigh these signals carefully against their risk tolerance and investment horizon.

Outlook and Investor Considerations

Given the prevailing bearish technical indicators, including daily moving averages, Bollinger Bands, and monthly MACD, Sasken Technologies appears to be under pressure. The divergence between weekly and monthly momentum indicators suggests potential short-term relief rallies but a dominant longer-term downtrend.

Investors should monitor key support levels near the 52-week low of ₹1,155.00 and watch for any volume spikes that could signal a reversal. The absence of strong OBV trends currently implies that any price moves may lack conviction.

Long-term investors may find value in the stock’s decade-long outperformance relative to the Sensex, but the recent technical deterioration and downgrade warrant a cautious approach. Active traders might consider waiting for clearer bullish confirmation signals before initiating new positions.

Summary

Sasken Technologies Ltd is navigating a challenging technical environment marked by bearish momentum and mixed indicator signals. While short-term oscillators like weekly MACD and KST offer some mild bullish hints, the dominant monthly and daily trends remain negative. The downgrade to a Sell rating by MarketsMOJO and the low Mojo Score reinforce the need for prudence. Comparative returns versus the Sensex highlight the stock’s volatility and sector-specific pressures, making it essential for investors to stay vigilant and consider alternative opportunities within the Computers - Software & Consulting sector.

Unlock special upgrade rates for a limited period. Start Saving Now →