Wipro Ltd. Forms Death Cross, Signalling Potential Bearish Trend

Understanding the Death Cross and Its Implications

The Death Cross is widely regarded by technical analysts as a significant bearish signal. It indicates that the short-term price momentum has weakened sufficiently to fall below the longer-term trend, often foreshadowing further declines. For Wipro Ltd., this crossover suggests that investor sentiment has turned cautious, with recent price action failing to sustain upward momentum.

Historically, the Death Cross has been associated with periods of sustained weakness in stock prices, especially when confirmed by other technical indicators. In Wipro’s case, this event comes amid a backdrop of underperformance relative to the broader market and sector peers.

Recent Performance and Market Context

Wipro’s one-year performance stands at a decline of 29.35%, starkly contrasting with the Sensex’s gain of 9.81% over the same period. This underperformance extends across multiple time frames: the stock has lost 6.84% in the past week versus the Sensex’s 0.98% drop, and 19.25% over the last month compared to a marginal 0.14% decline in the benchmark. Year-to-date, Wipro is down 18.07%, while the Sensex has fallen 2.08%.

Longer-term returns also highlight the stock’s relative weakness. Over three years, Wipro has gained 6.25%, significantly lagging the Sensex’s 36.80% rise. The five-year and ten-year performances further underline this trend, with Wipro’s returns at 0.30% and 118.25% respectively, compared to the Sensex’s 61.40% and 256.90% gains.

Valuation and Fundamental Metrics

Despite the technical weakness, Wipro’s valuation remains relatively attractive. The stock trades at a price-to-earnings (P/E) ratio of 16.86, below the industry average of 23.71, suggesting some value appeal for long-term investors. The company’s market capitalisation is substantial at ₹2,25,950 crore, classifying it as a large-cap stock with considerable liquidity and institutional interest.

However, the recent downgrade in the Mojo Grade from Buy to Hold on 19 Jan 2026, with a current Mojo Score of 52.0, reflects a cautious stance by analysts. The Market Cap Grade remains at 1, indicating limited upside potential from a market capitalisation perspective.

Technical Indicators Confirm Bearish Momentum

Beyond the Death Cross, several other technical indicators reinforce the bearish outlook for Wipro. The Moving Average Convergence Divergence (MACD) is bearish on both weekly and monthly charts, signalling downward momentum. The Relative Strength Index (RSI), however, remains bullish on weekly and monthly timeframes, suggesting some short-term oversold conditions that could prompt minor rebounds.

Bollinger Bands indicate mild bearishness weekly and outright bearishness monthly, reflecting increased volatility and downward pressure. The Know Sure Thing (KST) oscillator aligns with the bearish trend on weekly and monthly charts, while Dow Theory analysis shows no clear trend weekly and mild bearishness monthly.

On-Balance Volume (OBV) readings are mildly bearish across weekly and monthly periods, indicating that volume trends are not supporting price advances. Collectively, these signals point to a deteriorating trend environment, with limited near-term upside and heightened risk of further declines.

Sector and Industry Considerations

Operating within the Computers - Software & Consulting sector, Wipro faces competitive pressures and evolving market dynamics. The sector’s average P/E of 23.71 suggests that peers are trading at a premium, possibly due to stronger growth prospects or superior earnings momentum. Wipro’s lagging performance relative to the sector and benchmark indices highlights challenges in maintaining market share and investor confidence.

Investors should weigh these sectoral factors alongside the technical signals when considering Wipro’s stock. The current Death Cross and associated bearish indicators suggest caution, particularly for those with shorter investment horizons.

Investor Takeaway and Outlook

Wipro Ltd.’s formation of a Death Cross marks a critical juncture, signalling a potential shift into a prolonged bearish phase. The stock’s sustained underperformance relative to the Sensex and sector peers, combined with bearish technical indicators, suggests that investors should exercise caution.

While the valuation metrics offer some appeal, the downgrade to a Hold rating and the weak momentum indicators imply limited near-term upside. Long-term investors may want to monitor for signs of trend reversal or fundamental improvements before increasing exposure.

For traders and short-term investors, the Death Cross and accompanying technical signals may warrant defensive positioning or consideration of hedging strategies to mitigate downside risk.

Overall, Wipro’s current technical and fundamental profile points to a challenging environment ahead, with the Death Cross serving as a warning of potential further weakness in the stock’s price trajectory.

Upgrade at special rates, valid only for the next few days. Claim Your Special Rate →