Tech Mahindra Exhibits Short-Term Weakness, But Strong Q1 Results May Trigger Reversal: SEBI RA Deepak Pal

IT services major Tech Mahindra is currently in a bearish phase, with investors staying cautious ahead of its first-quarter (Q1 FY26) results due on July 16.

Tech Mahindra shares traded nearly 1% lower on Friday, tracking weakness in the tech sector after its peer, Tata Consultancy Services’ (TCS) Q1 earnings missed the street expectations. 

On the daily chart, Tech Mahindra has declined for two consecutive sessions and is now trading between its 14-day and 55-day exponential moving averages (EMA), SEBI-registered analyst Deepak Pal observed.

Technical indicators are pointing to short-term weakness, the analyst said. The Parabolic SAR, a momentum indicator, has flipped above the price candles.

The moving average convergence/divergence (MACD) shows signs of trend fatigue, while the relative strength index (RSI) is near 40.91, indicating waning momentum.

However, the price is approaching its 100-day EMA, a historically reliable support zone, and the upcoming Q1 results next week could act as a near-term catalyst, Pal said.

A further dip toward ₹1,560, which coincides with the 200-day EMA, may present a favorable risk-reward buying opportunity. He recommended accumulating at these levels with a stop loss at ₹1,550.

If the stock holds above the support and Q1 numbers impress, a short-term bounce toward ₹1,690 - 1,700 could be on the cards, Pal added.

On Stocktwits, retail sentiment turned ‘bearish’ from ‘bullish’ a week ago.

Despite muted revenue growth in FY25 due to challenges in the telecom sector, the company is well-positioned to capitalize on long-term growth driven by AI, 5G, and cloud innovations.

The stock has fallen 6.7% year-to-date (YTD).

Peer Tata Consultancy Services (TCS) posted a 6% rise in Q1 net profit to ₹12,740 crore, with revenue increasing 1.3% year-on-year to ₹63,437 crore, though down 3.1% in constant currency terms.

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