Tata Communications Ltd Technical Momentum Shifts Amid Mixed Market Signals

Price Movement and Market Context

On 1 February 2026, Tata Communications Ltd’s share price closed at ₹1,571, up from the previous close of ₹1,526.25. The stock traded within a range of ₹1,515.95 to ₹1,589.40 during the day, still well below its 52-week high of ₹2,004 but comfortably above the 52-week low of ₹1,293. This recent price appreciation of nearly 3% intraday contrasts with the broader market’s more subdued performance, as reflected in the Sensex’s returns.

Over the past week, Tata Communications has delivered a modest 0.58% return, slightly lagging the Sensex’s 0.90%. However, the stock’s one-month and year-to-date returns have been significantly negative at -13.28% and -13.90% respectively, compared to the Sensex’s -2.84% and -3.46%. This underperformance highlights the challenges faced by the telecom services sector amid evolving market dynamics.

Technical Indicators: Divergent Signals

The technical landscape for Tata Communications is characterised by a mixture of bearish and bullish signals, suggesting a period of consolidation rather than a clear directional trend. The Moving Average Convergence Divergence (MACD) indicator remains bearish on the weekly chart and mildly bearish on the monthly chart, signalling that downward momentum has not fully dissipated. This is corroborated by the Bollinger Bands, which are mildly bearish weekly and outright bearish monthly, indicating price volatility skewed towards the lower bands.

Conversely, the Relative Strength Index (RSI) on the weekly timeframe has turned bullish, suggesting improving buying interest and potential upward momentum in the short term. The daily moving averages also support a mildly bullish stance, with the stock price currently trading above its short-term averages, signalling some positive momentum building at the daily level.

The Know Sure Thing (KST) oscillator presents a mixed picture: mildly bearish on the weekly chart but mildly bullish on the monthly, reflecting a transitional phase where longer-term momentum may be stabilising even as short-term pressures persist. The Dow Theory assessment aligns with this, showing a mildly bearish trend on both weekly and monthly timeframes, indicating that the broader market trend for the stock remains cautious.

On-Balance Volume (OBV) analysis reveals a mildly bearish weekly trend with no clear monthly direction, suggesting that volume flows have not decisively supported a strong price move either way.

Technical Trend Evolution and Market Cap Considerations

The technical trend for Tata Communications has shifted from mildly bearish to sideways, reflecting a phase of indecision among investors. This sideways movement suggests that the stock is consolidating after recent declines, with neither bulls nor bears able to assert clear control. The company’s Market Cap Grade stands at 2, indicating a mid-cap status with moderate liquidity and market presence.

MarketsMOJO’s latest assessment downgraded Tata Communications from a Buy to a Hold rating on 4 August 2025, reflecting the tempered outlook amid mixed technical signals and sector headwinds. The current Mojo Score of 55.0 and Mojo Grade of Hold underscore the cautious stance investors should adopt, balancing the potential for short-term gains against the risk of further volatility.

Long-Term Performance and Sector Comparison

Despite recent setbacks, Tata Communications has delivered robust long-term returns. Over the past decade, the stock has appreciated by 294.23%, outperforming the Sensex’s 230.79% gain over the same period. Over five years, the stock’s return of 56.24% trails the Sensex’s 77.74%, while the three-year return of 27.29% also lags the benchmark’s 38.27%. This performance pattern suggests that while Tata Communications has been a strong performer historically, recent years have seen it underperform relative to the broader market.

Within the Telecom - Services sector, Tata Communications faces competitive pressures and evolving technological demands, which have influenced its price momentum and technical indicators. Investors should weigh these sector-specific challenges alongside the company’s technical signals when considering their positions.

Investor Takeaway: Navigating Mixed Technical Signals

For investors analysing Tata Communications, the current technical setup suggests a cautious approach. The mildly bullish daily moving averages and weekly RSI indicate some short-term buying interest, but the persistent bearishness in MACD and Bollinger Bands on weekly and monthly charts signals underlying weakness. The sideways trend implies that the stock may trade in a range before a decisive breakout or breakdown occurs.

Given the downgrade from Buy to Hold and the Mojo Score hovering at 55.0, investors should monitor key support levels near ₹1,515 and resistance around ₹1,590 closely. A sustained move above the daily moving averages and a bullish crossover in MACD could signal renewed upward momentum, while failure to hold support may lead to further declines.

Long-term investors may find value in Tata Communications’ strong decade-long performance, but should remain mindful of sector headwinds and the company’s recent relative underperformance. Diversification within the telecom sector and consideration of higher-rated alternatives may be prudent strategies in the current environment.

Conclusion: A Stock in Technical Transition

Tata Communications Ltd is currently navigating a complex technical landscape marked by mixed momentum indicators and a sideways price trend. While short-term signals offer some optimism, the broader technical picture remains cautious, reflecting ongoing sector challenges and market uncertainties. Investors are advised to adopt a balanced view, combining technical analysis with fundamental insights and sector context to make informed decisions.

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