Tata Communications Ltd Faces Bearish Momentum Amid Technical Downgrade

Technical Momentum and Indicator Overview

The telecom services company’s technical profile has deteriorated over recent sessions, with the MarketsMOJO Mojo Score dropping to 44.0 and the Mojo Grade downgraded from Hold to Sell as of 16 Feb 2026. This downgrade reflects a weakening outlook driven by bearish signals across multiple timeframes and technical tools.

On the weekly chart, the Moving Average Convergence Divergence (MACD) indicator has turned bearish, signalling a potential downtrend in momentum. The monthly MACD remains mildly bearish, suggesting that while the longer-term trend is not decisively negative, caution is warranted. The Relative Strength Index (RSI) on both weekly and monthly charts currently shows no clear signal, hovering in neutral territory and indicating neither overbought nor oversold conditions.

Bollinger Bands analysis further confirms the bearish tilt, with the weekly bands indicating increased volatility and downward pressure, while the monthly bands remain mildly bearish. Daily moving averages have crossed into bearish territory, reinforcing the short-term negative momentum. The Know Sure Thing (KST) oscillator presents a mixed picture: bearish on the weekly timeframe but mildly bullish monthly, underscoring the divergence between short- and long-term momentum.

Price Action and Volatility

Tata Communications’ current price of ₹1,622.75 is down from the previous close of ₹1,655.20, with intraday trading ranging between ₹1,616.00 and ₹1,642.75. The stock remains well below its 52-week high of ₹2,004.00 but comfortably above the 52-week low of ₹1,293.00, indicating a wide trading range over the past year. This volatility is symptomatic of the broader uncertainty in the telecom sector and the stock’s technical challenges.

Volume-based indicators such as On-Balance Volume (OBV) show no definitive trend on weekly or monthly charts, suggesting that trading volumes have not yet confirmed the price direction decisively. Similarly, Dow Theory analysis reveals no clear trend on either timeframe, reflecting a market in consolidation or transition.

Comparative Performance and Market Context

Despite the recent technical setbacks, Tata Communications has delivered mixed returns relative to the broader market. Over the past week, the stock outperformed the Sensex with a 3.14% gain compared to the benchmark’s 0.94% decline. However, this short-term strength masks longer-term underperformance, with the stock down 7.44% over the past month versus a marginal 0.35% drop in the Sensex.

Year-to-date, Tata Communications has declined 11.07%, significantly lagging the Sensex’s 2.28% fall. Over one year, the stock has gained 8.24%, slightly underperforming the Sensex’s 9.66% rise. The three- and five-year returns also trail the benchmark, with Tata Communications up 29.30% and 54.42% respectively, compared to Sensex gains of 35.81% and 59.83%. Notably, the ten-year return of 362.39% surpasses the Sensex’s 259.08%, highlighting the company’s strong long-term growth despite recent volatility.

Sector and Industry Considerations

Operating within the Telecom - Services sector, Tata Communications faces sector-specific headwinds including regulatory pressures, competitive intensity, and evolving technology demands. The technical deterioration may reflect broader sector challenges as well as company-specific factors. Investors should weigh these dynamics alongside the technical signals when considering exposure to this stock.

Given the current technical landscape, the MarketsMOJO Market Cap Grade remains low at 2, indicating limited market capitalisation strength relative to peers. This, combined with the Sell Mojo Grade, suggests a cautious stance is prudent.

Outlook and Investor Implications

The shift from mildly bullish to bearish technical parameters signals a cautious outlook for Tata Communications in the near term. The confluence of bearish MACD readings, declining moving averages, and negative Bollinger Band trends suggests that downward price pressure may persist. The absence of strong RSI or volume confirmation tempers the conviction somewhat, but the overall technical picture leans towards a correction or consolidation phase.

Investors should monitor key support levels near the 52-week low of ₹1,293.00 and watch for any reversal signals in momentum indicators. A sustained break below current levels could invite further selling pressure, while a rebound above daily moving averages might signal a return to stability.

Given the downgrade to a Sell rating and the modest Mojo Score, portfolio managers and retail investors alike may consider reducing exposure or seeking alternative telecom stocks with stronger technical and fundamental profiles. The mixed long-term returns relative to the Sensex underscore the importance of a balanced approach, combining technical analysis with broader market and sector insights.

Summary

Tata Communications Ltd’s recent technical parameter changes highlight a shift towards bearish momentum, with multiple indicators signalling caution. The stock’s price decline, combined with a downgrade in Mojo Grade to Sell, reflects growing investor concern amid uncertain sector dynamics. While short-term price action shows weakness, the longer-term performance remains respectable but lagging the benchmark. Investors should carefully assess technical signals alongside fundamental factors before making allocation decisions in this telecom services stock.

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