Vardhman Special Steels Ltd Faces Mildly Bearish Momentum Amid Technical Downgrade

Technical Trend Overview

As of 27 Jan 2026, Vardhman Special Steels Ltd’s share price closed at ₹250.30, down 4.61% from the previous close of ₹262.40. The stock’s 52-week range remains wide, with a high of ₹322.35 and a low of ₹178.30, underscoring significant volatility over the past year. The recent price action has shifted the technical trend from a neutral sideways pattern to a mildly bearish one, signalling increased selling pressure.

On the weekly and monthly charts, the Moving Average Convergence Divergence (MACD) indicator has turned mildly bearish, suggesting that momentum is weakening. The MACD histogram shows a declining trend, with the MACD line crossing below the signal line on the weekly timeframe, a classic bearish signal. This aligns with the Bollinger Bands, which are also indicating bearishness on both weekly and monthly scales, as the price has moved closer to the lower band, signalling potential oversold conditions but also downward momentum.

Conversely, the daily moving averages present a mildly bullish picture. The short-term moving averages (such as the 20-day and 50-day) remain above the longer-term averages, indicating some underlying support in the near term. However, this bullishness is tempered by other indicators.

Momentum and Volume Indicators

The Relative Strength Index (RSI) on both weekly and monthly charts currently shows no clear signal, hovering around neutral levels. This suggests that the stock is neither overbought nor oversold, leaving room for either a rebound or further decline depending on market catalysts.

The Know Sure Thing (KST) oscillator, a momentum indicator that aggregates multiple rate-of-change calculations, is mildly bearish on both weekly and monthly timeframes. This reinforces the view that momentum is waning, although not decisively so.

On-Balance Volume (OBV), which measures buying and selling pressure based on volume flow, is also mildly bearish on weekly and monthly charts. This indicates that volume trends are not supporting a strong upward move, with sellers slightly dominating.

Dow Theory and Broader Market Context

According to Dow Theory, the weekly trend is mildly bearish, while the monthly trend remains mildly bullish. This divergence suggests that while short-term sentiment is cautious or negative, the longer-term outlook retains some optimism. Investors should monitor this closely for confirmation of either a sustained recovery or further correction.

Comparing Vardhman Special Steels Ltd’s returns to the Sensex reveals a mixed performance. Over the past week, the stock has declined by 8.9%, significantly underperforming the Sensex’s 2.43% drop. The one-month and year-to-date returns are also weaker, with losses of 14.03% and 12.07% respectively, compared to Sensex declines of 4.66% and 4.32%. However, over longer horizons, the stock has outperformed substantially, delivering 11.27% over one year, 50.62% over three years, 338.74% over five years, and an impressive 1420.07% over ten years, compared to the Sensex’s respective returns of 6.56%, 33.80%, 66.82%, and 233.68%.

Mojo Score and Rating Changes

MarketsMOJO’s proprietary Mojo Score for Vardhman Special Steels Ltd currently stands at 47.0, reflecting a Sell rating. This represents a downgrade from the previous Hold rating, effective 23 Jan 2026. The downgrade is consistent with the technical deterioration observed in recent weeks and months. The company’s Market Cap Grade is 3, indicating a mid-tier market capitalisation relative to its peers in the Iron & Steel Products sector.

The downgrade signals caution for investors, as the technical indicators suggest that the stock may face further downside pressure in the near term. The mildly bearish weekly and monthly MACD, combined with bearish Bollinger Bands and volume trends, support this view. However, the mildly bullish daily moving averages and the neutral RSI indicate that a sharp reversal is not imminent, leaving room for a potential consolidation phase.

Price Action and Volatility

On 27 Jan 2026, the stock traded within a range of ₹243.15 to ₹261.65, closing near the lower end of the day’s range. This intraday weakness adds to the bearish sentiment. The gap between the current price and the 52-week high of ₹322.35 is substantial, suggesting that the stock has retraced significantly from its peak. Meanwhile, the 52-week low of ₹178.30 provides a distant support level, though the stock is currently trading closer to the mid-point of this range.

Investors should be mindful of the stock’s volatility, as the recent sharp declines have increased downside risk. The technical indicators collectively point to a cautious stance, with a preference for monitoring further developments before committing to fresh positions.

Sector and Industry Context

Vardhman Special Steels Ltd operates within the Iron & Steel Products sector, a segment that has faced cyclical headwinds due to fluctuating raw material costs, global demand uncertainties, and regulatory pressures. The sector’s performance often correlates with broader economic cycles and infrastructure spending trends. The stock’s recent technical deterioration may partly reflect these macroeconomic challenges, as well as company-specific factors.

Despite short-term technical weakness, the company’s long-term returns have been robust, significantly outperforming the Sensex over five and ten-year periods. This suggests that while near-term momentum is subdued, the stock retains potential value for investors with a longer investment horizon who can tolerate volatility.

Investor Takeaway

In summary, Vardhman Special Steels Ltd is currently navigating a phase of mildly bearish momentum, as evidenced by multiple technical indicators. The downgrade to a Sell rating by MarketsMOJO reflects this cautious outlook. Investors should weigh the short-term risks against the company’s strong historical performance and sector fundamentals.

Those considering exposure to this stock may prefer to wait for clearer signs of trend reversal or confirmation of support levels before initiating new positions. Meanwhile, monitoring volume trends, MACD crossovers, and RSI movements will be critical in assessing the stock’s next directional move.

Conclusion

Vardhman Special Steels Ltd’s technical landscape is currently characterised by a shift towards bearish momentum, tempered by some short-term bullish signals. The stock’s underperformance relative to the Sensex in recent weeks and months adds to the cautious sentiment. However, its impressive long-term returns and sector positioning offer a nuanced investment case. Careful analysis of evolving technical indicators and market conditions will be essential for investors aiming to navigate this stock’s near-term volatility.

Unlock special upgrade rates for a limited period. Start Saving Now →