India’s top FMCG and conglomerate player ITC Ltd finds itself back in the market limelight with its shares approaching a 52-week low. On Monday, ITC shares declined for the fourth consecutive day, quoting below the Rs 400 level for the second consecutive day, despite the broader markets being firm. The shares fell to a day’s low of Rs 396.30 on the BSE from its last close of Rs 398.30 with the firm’s market cap at Rs 5.01 lakh crore.
Even though the stock had a temporary bounceback to the Rs 400 level in late morning trading, technical factors indicate that the stock is still in a bearish phase. ITC’s relative strength index (RSI) had fallen to 30 levels, indicating an oversold situation and sellers’ control in the market. The stock is trading below both short-term and long-term moving averages, reflecting consistent weakness in what is generally a defensive industry.
The Current Downtrend
The correction that has taken place over the past fortnight has taken ITC shares to the brink of its 52-week low of Rs 391.50 on March 3, 2025. Most analysts are still bearish on the short-term trajectory of the stock and are targeting further declines to levels of Rs 350 if the selling pressure continues.
Ameya Ranadive, Chartered Market Technician and Senior Technical Analyst at StoxBox, highlighted the persistent downward momentum: “ITC has been under consistent pressure, trading within a downward-sloping channel and forming a sequence of lower highs and lower lows over the past year. Currently, no reversal signals are visible on the charts. Near-term support is at Rs 390–Rs 380, and a resolute breakdown below this level may see selling pressure escalating, which in turn could pull the stock to Rs 365–Rs 350 levels. On the flip side, a consistent close above Rs 405 on a weekly basis is needed to establish strength and provide an opportunity for a reversal towards Rs 425–Rs 440 levels. Otherwise, caution is the word, with the trend remaining strongly negative.
Ravi Singh, SVP Retail Research at Religare Broking, too was of the same view, observing that ITC is strongly placed in a bearish trend: “ITC remains to show a bearish trend on the weekly chart, since the stock is trading strongly in a well-defined falling channel.”. The share is trading close to its short-term support level of Rs 400, which could see a short-term bounce back towards Rs 418–Rs 420 levels, close to a 50-day EMA line. The medium-term trend, though, remains bearish with a sell-on-rise strategy, until the price breaks above the short-term resistance of Rs 430 decisively and holds above that level. On the downside, any fall below the immediate support level may trigger the downtrend towards Rs 380–Rs 390 in coming sessions.”
Technical Perspective
Technical analysts point to several key indicators that suggest ITC is likely to remain under pressure in the near term. Drumil Vithlani, Technical Research Analyst at Bonanza, observes, “ITC continues to trade below a falling wedge formation, maintaining a pattern of lower highs and lower lows. The stock is trading below the 20-day EMA, close to Rs 399, and has immediate support at Rs 383. The RSI at 31 indicates weakness as it inches towards the oversold region, though chances of a short-term technical recovery cannot be lost. He recommends selling on any pullback to Rs 410–415 with a stop loss above Rs 425. He is of the view that the stock will trade in the range of Rs 383–Rs 375.
The general consensus among technical analysts is that ITC continues to be in a well-defined downtrend. Short-term rallies do occur, but they tend to be viewed as selling opportunities and not buying opportunities, in line with the “sell on rise” strategy.
AR Ramachandran, a self-employed SEBI-registered analyst, is a tad more positive: “ITC share price is mildly bullish and oversold on the daily charts with firm support at Rs 396. A daily close above the resistance level of Rs 403 can result in a target of Rs 421 in the short term.” Yet here too, the overall technical backdrop indicates that any revival will be temporary unless the stock breaks above key resistance levels firmly.
Investor Sentiment and Outlook
Investor sentiment towards ITC has been prudent, weighing in with general apprehensions regarding the FMCG space and its defence stocks. The diversified business of the company — across cigarettes, FMCG goods, hotels, and agribusiness — historically offers stability, but even such resilient companies are not exempt from market forces. The recent downtrend indicates that investors are growing more cautious, especially with the stock near historically low levels.
Investors also need to factor in macroeconomic issues, such as increasing inflation, shifts in consumer purchasing patterns, and possible regulatory heat in the tobacco business, which is a major chunk of ITC’s business. Anything negative in these segments could add to the selling pressure.
Should You ‘Sell on Rise’?
With the ongoing technical and market situation, the general counsel of analysts is one of caution. The stock is oversold, near critical support levels, and there is no definite reversal signal. Short-term speculators may look to sell on any recovery, especially if the price approaches resistance levels like Rs 410–Rs 415, with a tight stop-loss to guard against sudden upshoots. Long-term investors would need to carefully balance the risk-reward equation in favour of ITC’s historically strong fundamentals compared to its current technical weakness.
Unless and until ITC shows a strong close above Rs 405–Rs 410 on a weekly basis or beats Rs 430 convincingly, the stock is still in a downward trend. This implies that for the majority of investors, a cautious “wait-and-watch” or “sell-on-rise” strategy would be wiser than trying to catch a bottom in a market with high bearish momentum.
ITC’s current stock performance reflects the plight even market veterans experience during technical weakness and market turbulence. With the stock trading close to its 52-week lows and major technical indicators signaling further pressure, investors need to be careful. Short-term investors could ride small reversals for selling purposes, whereas long-term investors would do well to be cautious and keep an eye on fundamental indicators before initiating fresh positions. The wisdom of the market: ITC is a stock to monitor, but not perhaps to purchase at these levels.
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