ITC share price may log biggest monthly fall in 2 decades; what next?

ITC stock crash: Market experts decode trading strategy as ITC shares slide over 18% in January 2026 post tax hike on cigarettes. Analysts warn of possible further 19% fall; here's why

ITC stock has taken a severe beating on the bourses; with the stock ending lower in 10 out of the 11 trading sessions so far in January 2026 post the steep tax hike on cigarettes.  As of date, the stock has crashed 18.3 per cent with another 9 trading sessions remaining this month. At current levels, historical data shows that the stock is on course to register its biggest monthly loss in nearly two decades.  An analysis of the ITC stock monthly data from BSE shows that the stock had logged an 18.9 per cent monthly loss in May 2006 - nearly 20 years back. That apart, the stock had registered an 18.3 per cent and 18.1 per cent loss in May 2004 and October 2008, respectively. In the last two decades the stock has dropped more than 10 per cent in a month on only 12 counts, including the present fall.  The current fall is on account of a double-whammy on cigarettes. The government, on December 31, 2025, notified a new tax structure (levies in 20 - 55 per cent range) for tobacco and pan masala products, and raised the GST rate on cigarettes from 28 per cent to 40 per cent. The new rates are set to take effect from February 1, 2026.  Given this background, market experts decode a likely trading strategy in ITC share. 

ITC stock chart

Last close: ₹329 

 

 

  The daily chart shows that ITC stock is seen trading below its key moving averages post the breakdown on January 1.  Sacchitanand Uttekar, Vice President of Research & Data Analysis at Tradebulls Securities says that the major trend for ITC continues to remain weak, with expectations of a final corrective decline towards the ₹300 zone. This implies a downside risk of nearly 9 per cent from current levels.  "Since July 2023, ITC stock has been locked in a broader corrective structure, forming a Flat Wave Correction pattern, with its projected termination area placed around ₹300-mark," explains Uttekar.  From a short-term perspective, the analyst believes that the intensity of the recent correction has been sharp, which could pave the way for a temporary relief rally towards the ₹345 – ₹350 zone for ITC.  ALSO READ | ITC stock downgraded as excise duty hike raises margin, volume growth risks  However, such a move is likely to be corrective in nature unless the stock manages to decisively break and sustain above the ₹375 resistance, the analyst cautions.  Meanwhile, Dhupesh Dhameja, Derivatives Research Analyst at SAMCO Securities has a more bearish view on ITC, with projected downside risk of around 19.5 per cent for levels of around ₹265.  "On the higher timeframe, ITC stock has confirmed a Head-and-Shoulders breakdown below the ₹380 neckline, a level that earlier acted as a pivotal medium-term base. The measured implication of this pattern projects a downside objective near ₹265, which closely aligns with the rising 200-month moving average around ₹250–₹260," explains Dhameja.  Dhameja, however, highlights that the momentum indicators are stretched, with both daily and weekly RSI slipping into oversold territory, suggesting selling exhaustion and scope for minor short-covering rallies. However, such pullbacks are likely to encounter strong supply near ₹340–₹350, says the analyst. 

ITC stock ahead of Jan F&O expiry

  The NSE F&O data shows that ITC Put Call Ratio (PCR) stands at 0.33 - implying presence of more than 3 open positions in ITC Calls for every open bet in ITC Put.  The PCR has slipped to an extremely oversold 0.32, indicating dominant call positioning and hinting at only tactical short-covering bounces rather than a durable reversal, says Dhameja.  Further, the analyst highlights that the ITC price–open interest structure shows clear bearish undertones. Despite prices drifting toward the ₹330 zone, open interest has expanded sharply to ~25.2 crore contracts, signalling fresh short build-up rather than long liquidation, says the analyst.  Dhameja expects a tepid trend in ITC stock for the remainder of the January series. The monthly contract will expire on Tuesday, January 27, 2026.  "The derivatives landscape of January series mirrors the sideways-to-bearish tone seen in the cash market, with aggressive call writing at the 340 and 350 strikes, firmly capping near-term upside. On the downside, put open interest is concentrated at 330 and 320; a decisive breakdown below ₹320 could trigger further selling pressure toward ₹300, a critical make-or-break level," says Dhameja.  Disclaimer: The views expressed by the brokerage/ analyst in this article are their own and not those of the website or its management. Business Standard advises users to check with certified experts before taking any investment decisions.