Price Movement and Market Context
On 4 Feb 2026, Varun Beverages Ltd closed at ₹451.30, down 3.26% from the previous close of ₹466.50. The intraday range was wide, with a high of ₹492.00 and a low of ₹440.65, reflecting heightened volatility. The stock remains significantly below its 52-week high of ₹593.00, while still above the 52-week low of ₹419.40. This price action underscores a weakening upward momentum and increased selling pressure.
Comparatively, the stock’s returns have lagged the broader Sensex across multiple timeframes. Over the past week, Varun Beverages declined by 4.29%, whereas the Sensex gained 2.30%. The one-month return shows a sharper contrast, with the stock down 8.56% against the Sensex’s 2.36% loss. Year-to-date, the stock has fallen 7.87%, underperforming the Sensex’s modest 1.74% decline. Over the last year, the divergence is even starker: Varun Beverages has dropped 22.57%, while the Sensex rose 8.49%. Despite this recent underperformance, the stock has delivered robust long-term gains, with a three-year return of 94.35% versus the Sensex’s 37.63%, and a five-year return of 471.36% compared to 66.63% for the benchmark.
Technical Indicators Signal Bearish Shift
The technical landscape for Varun Beverages has shifted notably. The overall technical trend has deteriorated from mildly bearish to outright bearish, reflecting increased downside risk. The daily moving averages are firmly bearish, indicating that short-term price momentum is negative. This is corroborated by the Bollinger Bands, which show bearish signals on both weekly and monthly charts, suggesting the stock price is trending towards the lower band and may face continued selling pressure.
The Moving Average Convergence Divergence (MACD) indicator presents a mixed picture. On the weekly timeframe, MACD remains mildly bullish, hinting at some underlying positive momentum. However, the monthly MACD is mildly bearish, signalling that longer-term momentum is weakening. This divergence between weekly and monthly MACD readings suggests that while short-term traders might find some buying opportunities, the broader trend remains under pressure.
The Relative Strength Index (RSI) is neutral on both weekly and monthly charts, providing no clear signal of overbought or oversold conditions. This neutrality implies that the stock is not yet in an extreme momentum state but could be vulnerable to further downside if selling intensifies.
The Know Sure Thing (KST) indicator adds further nuance. It is bullish on the weekly chart but bearish on the monthly chart, reinforcing the notion of short-term strength amid longer-term weakness. Meanwhile, the On-Balance Volume (OBV) indicator is mildly bearish on both weekly and monthly timeframes, indicating that volume trends are not supporting price advances and that selling pressure may be increasing.
Dow Theory assessments align with this bearish outlook, showing mildly bearish signals on both weekly and monthly charts. This suggests that the stock is in a corrective phase within a broader downtrend, and investors should be cautious about expecting a sustained rally in the near term.
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Mojo Score and Ratings Update
MarketsMOJO has downgraded Varun Beverages Ltd’s Mojo Grade from Hold to Sell as of 3 Feb 2026, reflecting the deteriorating technical and fundamental outlook. The current Mojo Score stands at 44.0, which is below the threshold for a neutral or positive rating. The Market Cap Grade is rated at 1, indicating a relatively low market capitalisation standing within its peer group. This downgrade signals increased caution for investors, particularly given the stock’s recent underperformance relative to the broader market.
Long-Term Performance and Sector Context
Despite recent weakness, Varun Beverages has demonstrated impressive long-term growth, with a five-year return of 471.36%, significantly outperforming the Sensex’s 66.63% over the same period. This reflects the company’s strong positioning within the beverages sector, which has benefited from rising consumer demand and expanding distribution networks. However, the current technical signals suggest that the stock may be entering a consolidation or correction phase after a prolonged rally.
Within the beverages sector, Varun Beverages faces competitive pressures and margin challenges, which may be contributing to the recent technical deterioration. Investors should monitor sector-wide trends and company-specific developments closely to gauge the sustainability of any recovery.
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Investor Implications and Outlook
Given the current technical signals, investors should approach Varun Beverages with caution. The bearish moving averages and Bollinger Bands, combined with the downgrade in Mojo Grade, suggest that the stock may face further downside pressure in the near term. The mixed signals from MACD and KST indicators imply that short-term traders might find limited opportunities, but the broader trend remains unfavourable.
Risk-averse investors may consider reducing exposure or waiting for clearer signs of trend reversal before initiating new positions. Conversely, long-term investors with a higher risk tolerance might view current levels as a potential entry point, given the company’s strong historical performance and sector fundamentals, but should remain vigilant to technical developments.
Monitoring volume trends and momentum indicators will be crucial in the coming weeks to assess whether the stock can stabilise or if the bearish momentum will intensify. Additionally, macroeconomic factors and sector-specific news could influence the stock’s trajectory, underscoring the importance of a comprehensive investment approach.
Summary
Varun Beverages Ltd is currently navigating a challenging technical environment marked by a shift to bearish momentum. Key indicators such as moving averages, Bollinger Bands, and Dow Theory assessments point to increased downside risk, while mixed MACD and KST readings suggest short-term volatility. The recent downgrade to a Sell rating by MarketsMOJO further emphasises caution. Investors should weigh the stock’s strong long-term track record against the current technical headwinds and consider their risk appetite carefully before making investment decisions.
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