Swaraj Engines Ltd Technical Momentum Shifts Amid Bearish Signals

Recent Price Movement and Market Context

On 23 Feb 2026, Swaraj Engines closed at ₹3,521.00, down 1.99% from the previous close of ₹3,592.35. The stock traded within a range of ₹3,515.00 to ₹3,606.15 during the day, reflecting increased volatility. This decline contrasts with the broader market, where the Sensex showed modest gains, underscoring relative weakness in the stock’s price action.

Over the past week, the stock returned -2.02%, while the Sensex gained 0.23%. However, the one-month return of 2.32% outpaced the Sensex’s 0.77%, indicating some resilience in the medium term. Year-to-date, Swaraj Engines is down 1.84%, slightly better than the Sensex’s -2.82%. Notably, the stock has delivered robust long-term returns, with a 1-year gain of 24.74% versus Sensex’s 9.35%, a 3-year return of 121.63% compared to 36.45%, and a 5-year return of 166.70% against 62.73%. Over a decade, the stock has surged 340.26%, outperforming the Sensex’s 249.29%.

Technical Trend Shift: From Mildly Bearish to Bearish

Technical analysis reveals a clear deterioration in momentum. The overall technical trend has shifted from mildly bearish to bearish, signalling increased selling pressure. The daily moving averages are firmly bearish, with the stock trading below key averages, indicating a downtrend in the short term.

The Moving Average Convergence Divergence (MACD) indicator presents a bearish outlook on the weekly chart and mildly bearish on the monthly chart. This suggests that while short-term momentum is weakening, longer-term momentum remains somewhat subdued but not decisively negative.

The Relative Strength Index (RSI) currently shows no clear signal on both weekly and monthly timeframes, hovering in a neutral zone. This indicates that the stock is neither overbought nor oversold, leaving room for further directional movement based on other technical factors.

Bollinger Bands and KST Indicators Confirm Bearish Bias

Bollinger Bands on the weekly chart are bearish, with the price approaching the lower band, signalling increased volatility and potential downward continuation. The monthly Bollinger Bands remain mildly bearish, suggesting some caution but less immediate pressure.

The Know Sure Thing (KST) indicator aligns with this view, showing bearish momentum on the weekly chart and mildly bearish on the monthly chart. This momentum oscillator confirms the weakening trend and supports the bearish technical stance.

Volume and Dow Theory Signals

On-Balance Volume (OBV) presents a mildly bullish signal on the weekly chart, indicating that volume trends have not fully confirmed the price decline. This divergence may imply that selling pressure is not yet overwhelming, but caution is warranted.

Dow Theory analysis offers a mildly bullish signal on the weekly timeframe but no clear trend on the monthly chart. This mixed signal suggests that while some underlying strength exists, it is insufficient to reverse the prevailing bearish momentum.

Mojo Score and Grade Downgrade Reflect Technical Weakness

Swaraj Engines currently holds a Mojo Score of 47.0, categorised as a Sell rating, downgraded from a previous Hold on 16 Feb 2026. This downgrade reflects the deteriorating technical parameters and increased risk perception among investors. The Market Cap Grade stands at 3, indicating a mid-tier market capitalisation relative to peers in the Compressors, Pumps & Diesel Engines sector.

The downgrade is consistent with the bearish signals from multiple technical indicators, reinforcing the need for investors to exercise caution and consider risk management strategies.

Comparative Sector and Industry Context

Operating within the Compressors, Pumps & Diesel Engines industry, Swaraj Engines faces sectoral headwinds amid fluctuating demand and input cost pressures. While the broader sector has shown mixed performance, the stock’s technical deterioration may reflect company-specific challenges or profit-taking after strong multi-year gains.

Investors should monitor sector trends alongside technical signals to gauge potential recovery or further downside risk.

Key Support and Resistance Levels

The stock’s 52-week high stands at ₹4,725.95, while the 52-week low is ₹2,530.00. The current price near ₹3,521.00 places it closer to the lower end of this range, suggesting limited downside room before approaching significant support. However, the recent daily low of ₹3,515.00 and the downward momentum caution against aggressive buying at this stage.

Resistance near the recent high of ₹3,606.15 may cap short-term rallies, with moving averages acting as additional barriers to upward movement.

Investor Takeaway and Outlook

While Swaraj Engines Ltd has demonstrated impressive long-term returns, the recent shift in technical momentum to a bearish stance signals caution for near-term investors. The downgrade to a Sell rating and the alignment of multiple bearish indicators such as MACD, moving averages, Bollinger Bands, and KST suggest that the stock may face further downward pressure before stabilising.

Neutral RSI readings and mildly bullish volume indicators imply that the selling is not yet overwhelming, leaving open the possibility of a technical rebound. However, investors should closely monitor price action around key support levels and watch for confirmation of trend reversal before considering fresh positions.

Given the mixed signals from Dow Theory and OBV, a wait-and-watch approach may be prudent, especially for those with shorter investment horizons. Long-term investors may view current weakness as a potential entry point, provided the broader sector outlook remains favourable.

In summary, Swaraj Engines Ltd’s technical profile has shifted towards bearishness, reflecting increased risk and volatility. Investors should weigh these signals alongside fundamental analysis and sector dynamics to make informed decisions.

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