Technical Trend Shift and Moving Averages
After a period of consolidation, Tata Communications has transitioned from a sideways technical trend to a bullish one. The daily moving averages reinforce this positive momentum, signalling that short-term price action is gaining strength. The current price stands at ₹1,912.65, down from the previous close of ₹1,946.70, with intraday fluctuations between ₹1,891.60 and ₹1,948.65. The 52-week range remains broad, with a high of ₹2,050.00 and a low of ₹1,323.00, indicating significant volatility over the past year.
The bullish daily moving averages suggest that the stock is trading above its key short-term averages, which often acts as a support level and a positive sign for momentum traders. This shift is critical as it may attract technical buyers looking for confirmation of an upward trajectory.
MACD and KST Indicate Strength
The Moving Average Convergence Divergence (MACD) indicator is bullish on both weekly and monthly timeframes, signalling sustained upward momentum. This dual timeframe bullishness suggests that the stock’s medium- and long-term momentum is improving, which can be a precursor to further price appreciation if supported by volume and other indicators.
Similarly, the Know Sure Thing (KST) indicator, which aggregates multiple rate-of-change measures, is bullish on weekly and monthly charts. This reinforces the MACD’s message, indicating that momentum is building across different time horizons.
RSI and Dow Theory Present Caution
Contrasting the positive MACD and KST readings, the Relative Strength Index (RSI) on the weekly chart is bearish. This suggests that the stock may be experiencing short-term selling pressure or is approaching overbought conditions that could trigger a pullback. The monthly RSI, however, shows no clear signal, indicating a neutral stance over the longer term.
Dow Theory analysis adds further nuance: the weekly Dow Theory is mildly bearish, hinting at some underlying weakness or hesitation among market participants in the short term. The monthly Dow Theory shows no definitive trend, reflecting uncertainty or consolidation at the broader level.
Bollinger Bands and On-Balance Volume (OBV) Insights
Bollinger Bands on both weekly and monthly charts are mildly bullish, indicating that price volatility is expanding in a positive direction but without extreme breakout signals. This mild bullishness suggests a controlled upward move rather than a sharp spike, which can be more sustainable.
On-Balance Volume (OBV), a volume-based indicator, shows no clear trend on weekly or monthly timeframes. This lack of volume confirmation may temper enthusiasm, as strong price moves ideally should be accompanied by rising volume to validate the trend.
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Performance Comparison with Sensex
Examining Tata Communications’ returns relative to the Sensex reveals a mixed but generally favourable performance. Over the past week, the stock declined by 3.16%, while the Sensex gained 3.91%, reflecting short-term weakness. However, over the one-month period, Tata Communications surged 13.81%, significantly outperforming the Sensex’s 2.09% gain.
Year-to-date, the stock has returned 4.82%, contrasting with the Sensex’s negative 9.87%, and over the last year, Tata Communications gained 11.46% while the Sensex fell 6.10%. These figures highlight the stock’s resilience and ability to outperform the broader market in recent periods.
Longer-term returns show Tata Communications delivering 17.39% over three years versus the Sensex’s 21.18%, and a strong 47.00% over five years compared to the Sensex’s 46.30%. Most impressively, the 10-year return stands at 331.90%, far exceeding the Sensex’s 189.56%, underscoring the company’s robust growth trajectory over the decade.
Mojo Score and Rating Revision
MarketsMOJO assigns Tata Communications a Mojo Score of 61.0, reflecting a Hold rating, downgraded from a Buy on 15 Jun 2026. This revision aligns with the mixed technical signals and recent price weakness, suggesting investors should exercise caution. The mid-cap classification further emphasises the stock’s moderate risk profile within the Telecom - Services sector.
The downgrade indicates that while the stock shows potential for upward momentum, certain technical and market factors warrant a more conservative stance. Investors should monitor key technical indicators and price action closely before committing additional capital.
Outlook and Investor Considerations
The technical landscape for Tata Communications is nuanced. Bullish MACD and KST indicators on weekly and monthly charts suggest improving momentum and potential for further gains. However, the bearish weekly RSI and mildly bearish Dow Theory readings caution against over-optimism in the short term.
Moving averages support a positive trend, but the absence of volume confirmation via OBV and the mild nature of Bollinger Bands’ bullishness imply that any rally may be gradual rather than explosive. Investors should watch for a sustained break above recent highs near ₹2,050.00, supported by volume, to confirm a stronger bullish phase.
Given the recent downgrade to Hold, a balanced approach is advisable. Investors with existing positions might consider partial profit-taking or tightening stop-loss levels, while new entrants may wait for clearer confirmation of trend strength.
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Summary
Tata Communications Ltd’s technical parameters reveal a stock at a crossroads. The shift from sideways to bullish trend and positive MACD and KST readings provide a foundation for optimism. However, caution is warranted due to bearish weekly RSI, mild Dow Theory bearishness, and lack of volume confirmation. The recent Mojo Score downgrade to Hold reflects this balanced view.
Investors should weigh the stock’s strong long-term returns and sector positioning against short-term technical uncertainties. Monitoring price action around key resistance levels and volume trends will be crucial in determining the next phase of momentum for Tata Communications.
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