Tata Communications Ltd Technical Momentum Shifts Amid Mixed Market Signals

Technical Trend Overview and Price Movement

The telecom services stock, classified as a mid-cap with a Market Cap Grade reflecting this status, has seen its technical trend deteriorate from mildly bearish to outright bearish. The daily moving averages remain bearish, signalling that short-term price momentum is weakening. The stock’s current price of ₹1,461.95 is closer to its 52-week low of ₹1,361.05 than its 52-week high of ₹2,004.00, indicating a significant retracement from recent highs.

On 13 Mar 2026, the stock traded within a range of ₹1,438.55 to ₹1,481.90, closing near the lower end of this band. This price action reflects the prevailing selling pressure and cautious investor sentiment amid mixed technical signals.

MACD and RSI: Divergent Signals

The Moving Average Convergence Divergence (MACD) indicator remains bearish on both weekly and monthly timeframes, reinforcing the negative momentum. This suggests that the stock’s short-term momentum is lagging behind its longer-term trend, a classic warning sign for investors to exercise caution.

Conversely, the Relative Strength Index (RSI) presents a more nuanced picture. Both weekly and monthly RSI readings are bullish, indicating that the stock is not currently oversold and may have some underlying strength. This divergence between MACD and RSI points to a complex momentum environment where short-term selling pressure is met with some underlying buying interest.

Bollinger Bands and Moving Averages Confirm Bearish Bias

Bollinger Bands analysis shows a mildly bearish stance on the weekly chart and a bearish outlook on the monthly chart. The stock price is hovering near the lower band, which often signals increased volatility and potential for further downside if the trend continues.

Daily moving averages remain bearish, with the stock trading below key averages, signalling that the short-term trend is unfavourable. This technical setup suggests that unless the stock can break above these averages convincingly, downward momentum may persist.

Additional Technical Indicators: KST, Dow Theory, and OBV

The Know Sure Thing (KST) indicator is bearish on the weekly timeframe but mildly bullish on the monthly chart, reflecting a mixed momentum scenario. This suggests that while short-term momentum is weak, there may be some longer-term stabilisation or recovery potential.

Dow Theory assessments align with this view, showing mildly bearish trends on both weekly and monthly scales. This reinforces the notion that the stock is in a cautious phase, with neither strong bullish nor bearish conviction dominating.

On-Balance Volume (OBV) shows no clear trend on weekly or monthly charts, indicating that volume is not confirming price movements decisively. This lack of volume confirmation often signals uncertainty among market participants.

Comparative Returns and Market Context

Examining Tata Communications’ returns relative to the Sensex reveals a challenging performance over recent periods. The stock has outperformed the Sensex marginally over the past week with a 0.13% gain compared to the Sensex’s 4.98% decline. However, over the last month and year-to-date, the stock has underperformed significantly, with returns of -14.08% and -19.88% respectively, compared to the Sensex’s -9.13% and -10.78%.

Longer-term returns show a more positive picture, with 3-year and 10-year returns of 21.81% and 306.89% respectively, though these still lag behind the Sensex’s 28.58% and 207.61% over the same periods. The 5-year return of 13.35% also trails the Sensex’s 49.70%, highlighting the stock’s relative underperformance in the medium term.

Mojo Score Upgrade and Rating Implications

MarketsMOJO has upgraded Tata Communications Ltd’s Mojo Grade from Sell to Hold as of 9 Mar 2026, reflecting a neutral stance amid the mixed technical signals. The current Mojo Score stands at 50.0, indicating a balanced outlook without strong conviction either way. This upgrade suggests that while the stock is not yet a buy, it has stabilised enough to warrant a hold rating, signalling investors to monitor developments closely.

Investment Considerations and Outlook

Investors should weigh the bearish technical momentum against the bullish RSI signals and the stock’s proximity to its 52-week low. The absence of volume confirmation and mixed KST and Dow Theory readings imply that the stock may be in a consolidation phase before a clearer directional move emerges.

Given the telecom sector’s inherent volatility and Tata Communications’ mid-cap status, cautious investors may prefer to wait for confirmation of trend reversal or sustained momentum before increasing exposure. The current technical environment suggests that downside risks remain, but selective buying on dips could be considered for those with a higher risk appetite.

Summary

Tata Communications Ltd’s technical parameters reveal a stock grappling with bearish momentum, despite some underlying bullish signals from RSI and longer-term indicators. The downgrade in technical trend to bearish, combined with weak moving averages and MACD readings, suggests caution. However, the Mojo Grade upgrade to Hold reflects a stabilising outlook, encouraging investors to monitor for potential trend reversals.

Comparative returns indicate underperformance against the Sensex in the short to medium term, though the stock’s long-term gains remain robust. Investors should consider the mixed technical signals and sector dynamics before making allocation decisions, balancing risk with the potential for recovery.

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