Tata Communications Gains 2.11%: 6 Key Factors Driving the Week’s Technical Shift

16 February: Death Cross Formation and Mixed Technical Momentum

On 16 Feb 2026, Tata Communications Ltd experienced a significant technical event with the formation of a Death Cross, where the 50-day moving average crossed below the 200-day moving average. This is widely regarded as a bearish signal indicating potential long-term weakness and increased selling pressure. The stock closed at Rs.1,622.75, down 1.96% on the day, contrasting with the Sensex’s 0.70% gain to 36,787.89.

Despite the bearish Death Cross, some technical indicators showed a nuanced outlook. Daily moving averages were mildly bullish, and the weekly RSI turned positive, suggesting short-term momentum improvement. However, weekly MACD and Bollinger Bands remained bearish, reinforcing caution. The stock traded within a volatile range, with a high of Rs.1,701.45 and a low of Rs.1,642.70, reflecting investor uncertainty amid mixed signals.

17 February: Downgrade to Sell Amid Technical and Financial Concerns

The following day, 17 Feb, Tata Communications was downgraded by MarketsMOJO from Hold to Sell, with its Mojo Score dropping to 44.0. The downgrade was driven by deteriorating technical indicators, including bearish daily moving averages and a firmly bearish weekly MACD, alongside flat financial performance and high leverage concerns. The stock price declined further to Rs.1,622.75, down 1.96%, underperforming the Sensex’s 0.32% gain.

Financially, the company showed sluggish growth with a 2.06% CAGR in operating profit over five years and a low ROCE of 11.37%. High debt levels, with a debt-to-equity ratio of 12.62 times, and reliance on non-operating income for nearly half of its quarterly profit before tax, raised red flags. Valuation metrics were mixed, with an attractive EV/CE ratio of 3.8 but an elevated PEG ratio of 9.5, indicating market expectations not yet realised.

18 February: Mild Recovery Amid Mixed Technical Signals

On 18 Feb, Tata Communications edged up slightly by 0.32% to close at Rs.1,656.20, while the Sensex gained 0.43%. The technical momentum remained mixed; daily moving averages were still bearish, but weekly RSI showed bullish tendencies. The weekly MACD remained bearish, and Bollinger Bands suggested ongoing downward pressure. The stock traded in a narrow range between Rs.1,634.20 and Rs.1,659.00, reflecting consolidation amid uncertainty.

19 February: Shift to Mildly Bearish Momentum

The stock closed at Rs.1,650.95 on 19 Feb, a marginal 0.32% gain from the previous day, but technical indicators signalled a shift from bearish to mildly bearish momentum. Weekly MACD remained bearish, while monthly MACD improved slightly to mildly bearish. Weekly RSI was bullish, suggesting some short-term strength, but Bollinger Bands stayed mildly bearish. The Know Sure Thing (KST) indicator showed bearish weekly readings but mildly bullish monthly signals, indicating a complex technical landscape.

20 February: Bearish Technical Shift Amid Market Pressure

On the final trading day of the week, 20 Feb, Tata Communications closed at Rs.1,690.05, up 2.16%, marking the week’s high and a strong finish. Despite this gain, technical momentum deteriorated to a more pronounced bearish trend. The weekly MACD remained bearish, and daily moving averages confirmed selling pressure. Bollinger Bands on weekly charts were bearish, while monthly indicators were mildly bearish. The stock traded within Rs.1,645.00 to Rs.1,677.00, showing subdued volatility and cautious investor sentiment.

Daily Price Performance: Tata Communications vs Sensex

Key Takeaways

Positive Signals: Tata Communications outperformed the Sensex with a 2.11% weekly gain versus the benchmark’s 0.39%. The stock closed the week at its highest level of Rs.1,690.05, supported by short-term bullish RSI readings and daily moving averages showing tentative upward momentum on some days. The company’s long-term returns remain strong, with a ten-year gain exceeding 360%, underscoring its resilience despite recent volatility.

Cautionary Signals: The formation of a Death Cross early in the week and a downgrade to a Sell rating reflect significant technical and fundamental challenges. Bearish weekly MACD, Bollinger Bands, and daily moving averages indicate persistent downward pressure. Financial concerns, including flat profit growth, high leverage, and reliance on non-operating income, add to the risk profile. The mixed technical signals and subdued volume trends suggest ongoing uncertainty and potential for further volatility.

Investors should note the divergence between short-term bullish indicators and longer-term bearish momentum, implying a transitional phase. The stock’s underperformance relative to the Sensex in recent months and the downgrade highlight the need for careful monitoring of technical developments and financial performance.

Conclusion

Tata Communications Ltd’s week was marked by a complex interplay of technical signals and fundamental concerns. While the stock managed to close higher by 2.11%, outperforming the Sensex, the underlying technical momentum remains mixed with a prevailing bearish bias. The downgrade to a Sell rating and the Death Cross formation underscore the challenges facing the company amid a cautious market environment.

Long-term investors may find reassurance in the company’s historical growth and sector positioning, but the short- to medium-term outlook calls for prudence. Monitoring key technical indicators such as MACD, RSI, and moving averages will be essential to gauge the sustainability of any recovery. Given the current landscape, a balanced approach that weighs both the positive price action and the cautionary signals is advisable.

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