Tech Mahindra Ltd. Faces Technical Downshift Amid Price Momentum Weakness

Price Movement and Market Context

On 25 Feb 2026, Tech Mahindra’s share price closed at ₹1,346.55, down sharply by 6.60% from the previous close of ₹1,441.75. The intraday range saw a high of ₹1,422.40 and a low of ₹1,336.45, underscoring heightened volatility. This decline comes amid a broader underperformance relative to the benchmark Sensex, which has shown modest gains over comparable periods.

Examining returns, Tech Mahindra has lagged the Sensex significantly over recent intervals. The stock posted a one-week return of -11.65% against the Sensex’s -1.47%, and a one-month return of -20.85% compared to the Sensex’s positive 0.84%. Year-to-date, the stock is down 15.39%, while the Sensex has declined by 3.51%. Over the one-year horizon, Tech Mahindra’s return of -16.53% contrasts sharply with the Sensex’s 10.44% gain. Although the company has delivered positive returns over longer periods—20.38% over three years and 40.29% over five years—these lag the Sensex’s respective 38.28% and 61.92% gains. Even the impressive 10-year return of 219.58% trails the Sensex’s 256.13%.

Technical Indicators Signal Weakening Momentum

The technical landscape for Tech Mahindra has shifted noticeably. The weekly and monthly Moving Average Convergence Divergence (MACD) indicators have both turned mildly bearish, signalling a loss of upward momentum. The MACD, a key momentum oscillator, suggests that the stock’s recent price declines may continue in the near term.

Relative Strength Index (RSI) readings on both weekly and monthly charts currently show no clear signal, hovering in neutral territory. This indicates that while the stock is not yet oversold, it lacks the bullish momentum needed to sustain a rally.

Bollinger Bands, which measure volatility and price levels relative to moving averages, have turned bearish on both weekly and monthly timeframes. The stock price is trading near the lower band, suggesting increased selling pressure and potential continuation of the downtrend.

Moving Averages and Other Trend Measures

On a daily basis, moving averages remain mildly bullish, indicating some short-term support. However, this is overshadowed by weekly and monthly indicators such as the Know Sure Thing (KST) oscillator, which has turned mildly bearish. The KST’s decline reinforces the view that momentum is weakening across multiple timeframes.

Dow Theory analysis reveals a mildly bearish trend on the weekly chart, while the monthly chart shows no definitive trend. This mixed picture suggests that while short-term technicals are deteriorating, longer-term directional clarity remains elusive.

On-Balance Volume (OBV), a volume-based indicator that tracks buying and selling pressure, is mildly bearish on the weekly chart and neutral on the monthly chart. This implies that volume trends are not supporting a sustained price recovery at present.

Mojo Score and Grade Downgrade

Reflecting these technical developments, Tech Mahindra’s Mojo Score currently stands at 48.0, placing it in the Sell category. This represents a downgrade from the previous Hold rating as of 24 Feb 2026. The company’s Market Cap Grade remains at 1, indicating a relatively small market capitalisation compared to peers, which may contribute to increased volatility and risk perception.

The downgrade signals that the stock’s risk-reward profile has deteriorated, with technical indicators cautioning investors to reassess their positions. The combination of bearish momentum indicators and underperformance relative to the Sensex suggests that the stock may face further downside pressure in the near term.

Comparative Industry and Sector Context

Tech Mahindra operates within the Computers - Software & Consulting sector, an industry that has seen mixed performance amid evolving technology trends and macroeconomic challenges. While some peers have managed to sustain growth and positive momentum, Tech Mahindra’s technical deterioration sets it apart negatively within the sector.

Investors should consider the broader sector dynamics alongside the company’s individual technical signals. The current mildly bearish technical trend contrasts with some sector constituents that maintain stronger momentum, highlighting the importance of selective stock picking in this space.

Investor Takeaway and Outlook

Given the current technical signals, investors should exercise caution with Tech Mahindra shares. The shift to a mildly bearish trend across multiple momentum indicators, combined with significant underperformance relative to the Sensex, suggests that the stock may continue to face downward pressure in the short to medium term.

While the daily moving averages offer some short-term support, the broader weekly and monthly indicators caution against aggressive accumulation at this stage. Investors may wish to monitor for signs of technical stabilisation, such as a reversal in MACD or a breakout above key moving averages, before considering renewed exposure.

Longer-term investors should also weigh the company’s fundamental prospects and sector positioning against these technical headwinds. The current Mojo Grade Sell rating reflects a cautious stance, recommending a review of portfolio allocations and consideration of alternative opportunities within the technology sector or broader market.

In summary, Tech Mahindra’s recent technical deterioration underscores the importance of integrating momentum analysis into investment decisions. The stock’s price momentum shift and bearish technical indicators highlight the risks of holding positions amid weakening market sentiment.

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