Tata Communications Ltd Technical Momentum Shifts Amid Mixed Market Signals

Technical Trend and Momentum Overview

The technical trend for Tata Communications has transitioned from a bearish stance to mildly bearish, reflecting a tentative improvement but still indicating underlying weakness. The Moving Average Convergence Divergence (MACD) remains bearish on the weekly chart, signalling that downward momentum persists in the short term. On the monthly timeframe, the MACD is mildly bearish, suggesting that while the longer-term trend is not decisively negative, it lacks strong bullish conviction.

The Relative Strength Index (RSI) presents a more nuanced view. On a weekly basis, the RSI is bullish, indicating that recent price action has gained some upward momentum and the stock is not currently oversold. However, the monthly RSI shows no clear signal, implying that the longer-term momentum remains neutral and indecisive.

Bollinger Bands on both weekly and monthly charts are mildly bearish, signalling that price volatility is skewed towards the downside, with the stock price hovering near the lower band. This suggests that while the stock is not in a strong downtrend, it faces resistance to upward price movement.

Moving Averages and Other Indicators

Daily moving averages remain bearish, reinforcing the short-term negative momentum. The stock’s current price of ₹1,656.20 is below key daily moving averages, which often act as resistance levels. This bearish alignment of moving averages typically discourages aggressive buying until a clear reversal is confirmed.

The Know Sure Thing (KST) indicator adds further complexity. It is bearish on the weekly chart but mildly bullish on the monthly chart, reflecting a divergence between short-term weakness and potential longer-term strength. This divergence often signals a period of consolidation or sideways movement before a decisive trend emerges.

Other technical tools such as Dow Theory and On-Balance Volume (OBV) show no clear trend on either weekly or monthly timeframes, indicating a lack of strong directional conviction from market participants and volume flows.

Price Action and Volatility

On 19 Feb 2026, Tata Communications traded within a range of ₹1,634.20 to ₹1,659.00, closing slightly higher than the previous close of ₹1,650.95. The 52-week high stands at ₹2,004.00, while the 52-week low is ₹1,293.00, placing the current price closer to the lower end of its annual range. This proximity to the lower band highlights the stock’s vulnerability to further downside pressure if technical support levels fail to hold.

Comparative Performance Against Sensex

Examining Tata Communications’ returns relative to the Sensex reveals a mixed performance over various time horizons. Over the past week, the stock declined by 2.52%, underperforming the Sensex’s modest 0.59% loss. The one-month return shows a sharper divergence, with Tata Communications falling 5.53% while the Sensex gained 0.20%. Year-to-date, the stock is down 9.23%, significantly lagging the Sensex’s 1.74% decline.

However, over longer periods, Tata Communications has delivered respectable gains. The one-year return of 11.07% slightly outpaces the Sensex’s 10.22%, while the three-year and five-year returns of 33.54% and 56.87% respectively, though trailing the Sensex’s 37.26% and 63.15%, still represent solid appreciation. Notably, the ten-year return of 384.69% substantially exceeds the Sensex’s 254.07%, underscoring the company’s long-term growth potential despite recent volatility.

Mojo Score and Grade Implications

Tata Communications currently holds a Mojo Score of 44.0, which corresponds to a Sell grade, downgraded from Hold on 16 Feb 2026. This downgrade reflects the technical deterioration and the cautious outlook from MarketsMOJO’s quantitative assessment. The company’s Market Cap Grade is 2, indicating a mid-cap status within the Telecom - Services sector, which often entails higher volatility compared to large-cap peers.

The downgrade signals that investors should exercise prudence, as the technical indicators collectively suggest limited upside in the near term and potential for further downside. The mixed signals from momentum indicators like MACD and RSI, combined with bearish moving averages, reinforce the need for careful monitoring of price action and volume trends before committing to fresh positions.

Investor Takeaway and Outlook

For investors in Tata Communications, the current technical landscape advises caution. The mildly bearish trend and bearish daily moving averages suggest that the stock may face resistance in mounting a sustained rally. The weekly bullish RSI offers some hope of short-term relief rallies, but the absence of strong volume trends and mixed momentum indicators temper enthusiasm.

Given the stock’s proximity to its 52-week low and the recent downgrade in Mojo Grade, investors should consider risk management strategies such as setting stop-loss levels or reducing exposure until clearer bullish signals emerge. Monitoring key technical levels, including the 50-day and 200-day moving averages, will be critical to gauge any potential trend reversals.

Long-term investors may find comfort in the company’s solid decade-long returns and its strategic position within the Telecom - Services sector. However, near-term volatility and technical uncertainty warrant a measured approach, especially in the context of broader market conditions and sectoral trends.

Summary of Technical Indicators

• MACD: Weekly Bearish, Monthly Mildly Bearish
• RSI: Weekly Bullish, Monthly No Signal
• Bollinger Bands: Weekly & Monthly Mildly Bearish
• Moving Averages: Daily Bearish
• KST: Weekly Bearish, Monthly Mildly Bullish
• Dow Theory & OBV: No Clear Trend

These mixed signals highlight the importance of a cautious stance and the need for investors to closely monitor evolving price momentum and volume patterns before making significant portfolio adjustments.

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