Price Movement and Market Context
The stock closed at ₹1,544.45 on 23 Jan 2026, down 4.52% from the previous close of ₹1,617.55. Intraday volatility was evident, with a high of ₹1,659.50 and a low of ₹1,531.80. Despite this dip, the stock remains above its 52-week low of ₹1,293.00 but significantly below its 52-week high of ₹2,004.00, indicating a considerable retracement from recent peaks.
Comparatively, Tata Communications has underperformed the broader Sensex index over multiple time frames. The stock's one-week return stands at -12.06%, sharply contrasting with the Sensex's modest -1.29%. Over one month, the stock declined 14.09% versus the Sensex's -3.81%, and year-to-date losses are at 15.36% compared to the Sensex's -3.42%. Even over the one-year horizon, Tata Communications posted a negative return of -7.85%, while the Sensex gained 7.73%. Longer-term returns remain positive but lag the benchmark, with three-year returns at 14.77% against Sensex's 35.77%, and five-year returns at 49.60% versus 68.39% for the index.
Technical Indicator Analysis
The recent downgrade in the stock's technical trend from mildly bullish to mildly bearish is supported by several key indicators. The Moving Average Convergence Divergence (MACD) shows a mildly bearish signal on both weekly and monthly charts, suggesting weakening upward momentum. This is corroborated by the Bollinger Bands, which are bearish on weekly and monthly timeframes, indicating increased volatility and potential downward pressure.
Interestingly, the Relative Strength Index (RSI) presents a mixed picture. While the weekly RSI remains bullish, signalling some short-term buying interest, the monthly RSI offers no clear signal, reflecting uncertainty in the medium term. This divergence suggests that while short-term traders may find some support, the broader trend is less certain.
Moving averages on the daily chart remain mildly bullish, indicating that despite recent weakness, the stock price is still holding above key short-term averages. However, the KST (Know Sure Thing) oscillator is mildly bearish on weekly and monthly charts, reinforcing the notion of waning momentum. Dow Theory assessments align with this, showing mildly bearish signals across weekly and monthly periods.
On balance, the On-Balance Volume (OBV) indicator is mildly bearish on the weekly scale but bullish monthly, suggesting that while recent trading volumes have favoured sellers, longer-term accumulation may still be occurring.
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Mojo Score and Rating Revision
Reflecting these technical developments, Tata Communications' Mojo Score currently stands at 50.0, with a Mojo Grade downgraded from Buy to Hold as of 4 Aug 2025. This adjustment signals a more cautious stance from analysts, balancing the stock's fundamental strengths against recent technical weaknesses. The Market Cap Grade remains low at 2, indicating limited market capitalisation strength relative to peers.
The downgrade aligns with the stock's recent price underperformance and the mixed technical signals, suggesting investors should exercise prudence and monitor for confirmation of trend direction before committing to new positions.
Sector and Industry Considerations
Tata Communications operates within the Telecom - Services sector, which has faced headwinds amid evolving regulatory frameworks and competitive pressures. The sector's overall momentum has been subdued, with many players experiencing volatility in their technical indicators. Tata Communications' mildly bearish weekly and monthly technical trends mirror broader sector challenges, although the company's long-term fundamentals remain intact.
Investors should weigh these sector dynamics alongside the stock's technical signals to gauge potential risk and reward scenarios.
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Technical Outlook and Investor Implications
From a technical perspective, the shift to mildly bearish momentum suggests that Tata Communications may face further downside risk in the near term. The convergence of bearish MACD, Bollinger Bands, KST, and Dow Theory signals on weekly and monthly charts points to a weakening trend. However, the mildly bullish daily moving averages and weekly RSI indicate that short-term support levels could provide some relief.
Investors should closely monitor key support zones near the recent lows around ₹1,530 to ₹1,540. A sustained break below these levels could confirm a deeper correction, while a rebound might signal a resumption of the uptrend. Volume patterns, as indicated by OBV, will also be critical in confirming the strength of any move.
Given the current technical landscape and the Hold rating, a cautious approach is advisable. Long-term investors may consider waiting for clearer signs of trend reversal or confirmation of support before increasing exposure. Traders might look for short-term opportunities on technical bounces but should remain vigilant for signs of further weakness.
Long-Term Performance Context
Despite recent setbacks, Tata Communications has delivered robust long-term returns. Over the past decade, the stock has appreciated by 284.19%, outperforming the Sensex's 236.83% gain. This reflects the company's underlying growth potential and strategic positioning within the telecom services industry. However, the divergence in shorter-term returns highlights the importance of timing and technical analysis in managing exposure to this stock.
Investors should balance these long-term fundamentals with the current technical caution to make informed decisions aligned with their risk tolerance and investment horizon.
Summary
Tata Communications Ltd is currently navigating a complex technical environment marked by a shift from mildly bullish to mildly bearish momentum. Key indicators such as MACD, Bollinger Bands, and KST signal caution, while mixed RSI and moving averages suggest potential short-term support. The stock's recent price decline and underperformance relative to the Sensex have prompted a downgrade in its Mojo Grade from Buy to Hold.
Sector challenges and market volatility further complicate the outlook, underscoring the need for investors to adopt a measured approach. While long-term returns remain attractive, near-term technical signals advise prudence. Monitoring support levels and volume trends will be essential for anticipating the stock's next directional move.
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