Tata Consultancy Services Ltd. Faces Bearish Momentum Amid Technical Indicator Shifts

Price Performance and Market Context

TCS closed at ₹2,999.80 on 5 Feb 2026, down sharply by 6.95% from the previous close of ₹3,223.70. The intraday range saw a high of ₹3,122.00 and a low of ₹2,986.85, reflecting heightened volatility. This decline contrasts with the broader Sensex, which posted a modest gain of 1.79% over the past week, underscoring TCS’s underperformance in the short term.

Over longer horizons, TCS’s returns have lagged significantly behind the Sensex. The stock’s one-year return stands at -26.92%, while the Sensex gained 6.66% over the same period. Even over three and five years, TCS’s returns of -13.84% and -5.88% respectively pale in comparison to the Sensex’s robust 37.76% and 65.60% gains. However, the ten-year return of 148.18% remains respectable, though still trailing the Sensex’s 244.38% growth.

Technical Trend Analysis

The technical trend for TCS has shifted from mildly bearish to outright bearish, signalling increased downside pressure. The daily moving averages have deteriorated, with the stock trading below key averages, confirming a negative short-term momentum. This is compounded by the weekly and monthly MACD indicators, both firmly bearish, indicating that momentum is weakening across multiple timeframes.

RSI readings present a more nuanced picture. While the weekly RSI shows no clear signal, the monthly RSI remains bullish, suggesting some underlying strength or potential for a longer-term rebound. However, this bullish monthly RSI is overshadowed by bearish Bollinger Bands on both weekly and monthly charts, which indicate that the stock price is trending towards the lower band, a sign of sustained selling pressure.

Additional Technical Indicators

The KST (Know Sure Thing) indicator offers mixed signals: bullish on the weekly timeframe but bearish monthly, reflecting short-term attempts at recovery amid longer-term weakness. Dow Theory and On-Balance Volume (OBV) indicators show no definitive trend on either weekly or monthly charts, implying a lack of strong directional conviction from market participants.

Overall, the technical landscape suggests that while there may be intermittent short-term rallies, the dominant momentum remains negative, and investors should be wary of further declines unless confirmed by a reversal in key indicators.

Mojo Score and Rating Update

MarketsMOJO has upgraded TCS’s Mojo Grade from Sell to Hold as of 22 Apr 2025, reflecting a cautious stance amid the mixed technical signals. The current Mojo Score stands at 51.0, indicating a neutral outlook. The Market Cap Grade remains at 1, signalling that despite its large market capitalisation, the stock’s technical and momentum factors do not currently support a strong buy recommendation.

This rating adjustment aligns with the technical deterioration observed, suggesting that while the stock is not a sell candidate at present, investors should monitor for further confirmation before committing to new positions.

Comparative Sector and Industry Context

Within the Computers - Software & Consulting sector, TCS’s technical weakness contrasts with some peers that have maintained stronger momentum. The sector itself has been volatile, influenced by global technology trends and domestic IT spending patterns. TCS’s relative underperformance highlights the need for investors to consider alternative large-cap software stocks or diversified IT portfolios to mitigate risk.

Given the sector’s cyclical nature, the current bearish technical signals may reflect broader market concerns about growth prospects and margin pressures, which could weigh on TCS’s near-term performance.

Key Support and Resistance Levels

Technically, TCS’s 52-week low of ₹2,867.55 represents a critical support level. The current price of ₹2,999.80 is only marginally above this floor, suggesting limited downside buffer. On the upside, the 52-week high of ₹4,161.00 remains distant, and the stock faces resistance near the recent intraday high of ₹3,122.00.

Failure to hold above the support zone could trigger further selling, while a sustained move above the resistance levels would be required to signal a reversal in the bearish trend.

Investor Takeaway

Investors in TCS should approach the stock with caution given the prevailing bearish technical indicators and recent price weakness. The downgrade in technical trend from mildly bearish to bearish, combined with negative MACD and moving average signals, suggests that the stock may face continued downward pressure in the near term.

However, the bullish monthly RSI and weekly KST hint at potential pockets of strength that could emerge if broader market conditions improve or if the company reports positive earnings surprises. Close monitoring of support levels and volume trends will be essential to gauge the sustainability of any recovery attempts.

For those seeking exposure to the IT sector, it may be prudent to consider diversification or alternative large-cap stocks with stronger technical momentum until TCS confirms a reversal in trend.

Summary of Technical Indicators for TCS

• MACD: Weekly and Monthly - Bearish
• RSI: Weekly - No Signal; Monthly - Bullish
• Bollinger Bands: Weekly and Monthly - Bearish
• Moving Averages: Daily - Bearish
• KST: Weekly - Bullish; Monthly - Bearish
• Dow Theory and OBV: No clear trend on weekly or monthly

Conclusion

Tata Consultancy Services Ltd. currently faces a challenging technical environment, with multiple indicators signalling bearish momentum. While some oscillators suggest potential for longer-term strength, the dominant trend remains negative. Investors should weigh these technical signals carefully against fundamental factors and broader market conditions before making investment decisions.

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