TCS - Swing Trade Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Swing Trade Rating: 2.8

📊 Analysis Summary

TCS, despite being a fundamentally elite company, is currently not an ideal candidate for swing trading due to weak technical indicators and bearish momentum. The RSI and MACD suggest oversold conditions, but there's no confirmation of a reversal yet.

✅ Strengths

ROCE (64.6%) & ROE (52.4%): World-class efficiency.

EPS of ₹136: Strong earnings base.

Low P/E (22.4) vs Industry PE (29.1): Reasonably valued.

Dividend Yield (1.96%): Attractive for passive income.

Debt-to-Equity (0.10): Very low leverage.

Quarterly Profit Growth (5.98%): Stable earnings.

⚠️ Weaknesses

RSI at 20.1: Extremely oversold — risk of further downside.

MACD (-86.2): Strong bearish momentum.

Trading Below DMA 50 & 200: Downtrend confirmed.

52w Index at 0.97%: Near yearly low — weak relative strength.

FII Selling (-0.56%): Foreign investors reducing exposure.

Volume Spike: May indicate panic selling rather than accumulation.

📈 Optimal Entry Price

Wait for Confirmation: Entry only if RSI crosses above 30 and MACD flattens. Ideal buy zone: ₹3,100–₹3,150 on reversal signs.

📉 Exit Strategy (If Already Holding)

Target Exit: ₹3,300–₹3,350 Near 50 DMA — short-term resistance zone.

Stop Loss: ₹2,980 Below recent low — exit if RSI fails to recover or MACD deepens.

🧠 Final Thoughts

TCS is a long-term gem but a short-term trap for swing traders right now. The stock is deeply oversold, and while that may tempt contrarian entries, the lack of reversal signals makes it risky. Best to wait for technical confirmation before entering.

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