Tata Teleservices Share Price is on the Cusp of a Bearish Breakout

Summary:
• Tata Teleservices share price remained in a consolidated phase after the company published its earnings. What next for TTML?

Tata Teleservices share price remained in a consolidated phase after the company published its earnings. The stock was trading at 100.05 INR, where it has been in the past few days. It has crashed by more than 65% from its highest level this year. This means that the shares have underperformed the Nifty 50 index and other Asian indices.

Tata narrows its loss

Tata Teleservices is an IT company, which is part of Tata Group. It offers services to companies like Kellogs, Whirlpool, Solutions Infini, and Alliance Broadband among others. Some of its services are cloud & SAAS, collaboration, data services, voice services, and cybersecurity services among others.

Tata Teleservices announced its second-quarter earnings this week. Its sales rose to INR 2.7 billion in the quarter from the previous INR 2.6 billion a year earlier. Its revenue was over INR 2.79 billion while its net loss was INR 2.92 billion. This loss was much better than the INR 3.13 billion. Its diluted loss per share was INR 1.5.

Tata’s revenue for the first six months INR 5.4 billion, up from the previous INR 5.36 billion. Therefore, the company’s business is doing modestly well even as inflation continues biting. However, there are concerns about the company’s rising losses and the fact that many companies are reducing their spending as inflation bites.

Tata Teleservices share price forecast

In May, I warned that the Tata Teleservices stock price could crash by about 52%. The daily chart shows that the TATA stock price has been in a consolidation phase in the past few days. It remains slightly above the important support at 89.70, which was the lowest level on August 30th and March 8. The shares have moved slightly below 25-day and 50-day exponential moving averages (EMA). 

The Stochastic Oscillator moved slightly below the oversold level. It has formed a descending triangle pattern. Therefore, the shares will likely have a bearish breakout in the near term. If this happens, the stock will likely crash to INR 80. A move above the resistance at 110 will invalidate the bearish view.