ITC shares trading strategy: Stock in consolidation mode - Road ahead for investors

ITC share price: Shares of ITC continue to remain under pressure. The FMCG major has emerged as one of the worst-performing large-cap stocks falling 22% this year. The Sensex stock has posted negative returns for period up to three years (31.18% losses). 

Sentiment towards the stock deteriorated sharply after the government implemented a major increase in cigarette taxation effective February 1, 2026. The revised tax framework replaced the earlier compensation cess mechanism and raised the GST burden on cigarettes from 28% to 40% of the retail selling price.

ITC stock trades near the 52-week low of Rs 275 reached on June 4 this year and is in consolidation mode since then. 

ITC slipped to an intraday low of Rs 283 on Friday, highlighting the continued selling pressure in the counter. The stock is currently trading below all its major moving averages, including the 20-day, 50-day, 100-day and 200-day moving averages, indicating that the broader trend remains firmly bearish.

ITC's market capitalisation currently stands at around Rs 3.56 lakh crore. Momentum indicators show the stock nearing oversold territory, with the Relative Strength Index (RSI) at 37. Typically, an RSI reading below 30 is considered oversold and suggests that sellers have significantly outnumbered buyers.

The prolonged correction has resulted in substantial wealth erosion for shareholders, with the stock declining about 29% over the past six months and roughly 32.43% over the last one year.

Shitij Gandhi, AVP - Equity Technical Research, SMC Global Securities said, "ITC remains under pressure on the daily chart, with the stock continuing to trade below a falling trendline while slipping beneath key Fibonacci retracement levels. The recent decline below the Rs 300 level suggests that sellers retain the upper hand, keeping the broader structure weak. However, prices are now approaching a crucial support area around Rs 280– Rs 275 zone, which also coincides with the lower end of the measured move. This zone could attract some buying interest and trigger a short-term pullback. Nevertheless, unless the stock reclaims the Rs 305– Rs 311 range, any recovery is likely to be viewed as a relief rally within an overall bearish trend. On downside, the stock may decline towards Rs 260 levels in the near term. "

Hitesh Tailor, Technical Research Analyst at Choice Broking said, "ITC is trading below its key 20, 50, 100, and 200-week moving averages. The broader trend continues to remain weak, with a sequence of lower highs and lower lows indicating sustained selling pressure.

However, the stock is approaching an important support zone near Rs 275– Rs 280, where buying interest has started to emerge. From a technical perspective, immediate support is placed around Rs 275, while broader support is seen near Rs 250. On the upside, Rs 310 acts as the immediate resistance, coinciding with the 20-Week EMA, followed by a stronger resistance zone around Rs 345. A sustained move above these levels would be required to improve the medium-term technical structure."