Vardhman Special Steels Ltd Faces Bearish Momentum Amid Technical Downgrade

Technical Trend Shift and Market Context

On 19 February 2026, Vardhman Special Steels Ltd’s Mojo Grade was downgraded from Hold to Sell, with a current Mojo Score of 47.0. This downgrade reflects a deteriorating technical outlook, particularly within the Iron & Steel Products sector, where the company operates. The market cap grade remains modest at 3, indicating a relatively small market capitalisation compared to peers.

The stock closed at ₹252.00 on 24 February 2026, down marginally by 0.32% from the previous close of ₹252.80. The day’s trading range was between ₹252.00 and ₹258.00, with the 52-week high at ₹322.35 and the low at ₹178.30, highlighting a significant volatility range over the past year.

Price Momentum and Moving Averages

Price momentum has clearly shifted to the downside, as evidenced by the daily moving averages signalling a bearish trend. The stock’s inability to sustain levels above its short-term moving averages suggests selling pressure is prevailing. This is further corroborated by the weekly and monthly Bollinger Bands, both indicating bearish conditions, which typically imply increased volatility and a downward price bias.

The daily moving averages, which are critical for short-term traders, have crossed below key resistance levels, reinforcing the negative momentum. This technical deterioration aligns with the broader sector weakness and the company’s recent performance metrics.

MACD and RSI Analysis

The Moving Average Convergence Divergence (MACD) indicator presents a mixed but predominantly bearish picture. On a weekly basis, the MACD is firmly bearish, signalling that the short-term momentum is weakening relative to the longer-term trend. The monthly MACD, while mildly bearish, suggests that the longer-term downtrend is still in its early stages but gaining traction.

Relative Strength Index (RSI) readings, however, do not currently provide a clear signal. Both weekly and monthly RSI levels are neutral, indicating neither overbought nor oversold conditions. This lack of RSI confirmation means that while momentum is negative, the stock has not yet reached extreme levels that might suggest an imminent reversal or oversold bounce.

Additional Technical Indicators: KST, Dow Theory, and OBV

The Know Sure Thing (KST) indicator, which aggregates multiple rate-of-change calculations, confirms the bearish sentiment on a weekly basis and mildly bearish on a monthly scale. This suggests that momentum is weakening across multiple timeframes, reinforcing the negative outlook.

Dow Theory analysis shows no clear trend on the weekly chart but indicates a mildly bearish trend monthly. This divergence between timeframes highlights the transitional phase the stock is currently experiencing, with longer-term trends beginning to weaken while short-term trends remain uncertain.

On-Balance Volume (OBV), a volume-based indicator, shows no definitive trend weekly but mildly bearish signals monthly. This suggests that volume flows are not strongly supporting price advances, which is a negative sign for sustained upward momentum.

Comparative Performance Versus Sensex

Despite the recent technical setbacks, Vardhman Special Steels Ltd has demonstrated strong long-term returns relative to the benchmark Sensex. Over the past year, the stock has delivered a 19.60% return compared to Sensex’s 10.60%. Over five years, the stock’s return of 245.68% vastly outpaces the Sensex’s 67.42%, and over ten years, the stock has surged an impressive 1,357.90% against the Sensex’s 255.80%.

However, short-term performance has been more volatile. The stock declined 2.14% over the past week while the Sensex was flat, and year-to-date returns show a negative 11.47% for the stock versus a modest -2.26% for the Sensex. This recent underperformance aligns with the bearish technical signals and suggests caution for near-term investors.

Valuation and Market Capitalisation Considerations

With a market cap grade of 3, Vardhman Special Steels Ltd is classified as a smaller-cap entity within its sector. This smaller size can contribute to higher volatility and sensitivity to sectoral and macroeconomic shifts. Investors should weigh this factor alongside the technical indicators when considering exposure to the stock.

The downgrade from Hold to Sell by MarketsMOJO reflects these combined technical and fundamental concerns. The current Mojo Score of 47.0, below the neutral 50 mark, signals a cautious stance, advising investors to monitor the stock closely for further deterioration or potential recovery signals.

Investor Takeaway and Outlook

Vardhman Special Steels Ltd’s recent technical downgrade and bearish momentum indicators suggest that the stock is currently under pressure. The convergence of bearish signals from MACD, moving averages, Bollinger Bands, and KST across multiple timeframes points to a weakening trend that may persist in the near term.

However, the neutral RSI and mixed Dow Theory and OBV signals imply that the stock has not yet reached oversold extremes, leaving room for further downside or consolidation. Long-term investors may find value in the company’s strong historical returns relative to the Sensex, but short-term traders should exercise caution given the current technical environment.

Monitoring upcoming earnings, sectoral developments, and macroeconomic factors will be crucial to reassessing the stock’s trajectory. Until then, the technical landscape advises a conservative approach, with a preference for risk management and selective exposure.

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