Telstra Shares Outperform ASX 200 This Month, As Three Week Rally Snaps

Telstra shares (ASX: TLS) have outperformed the ASX 200 so far in September, holding its ground while the broader index has buckled. Yet the 1.65% weekly decline snapped a three-week winning streak, slipping below an important momentum marker in the process.

The Telstra share price rounded out the week at A$4.78, breaking below its 50-day simple moving average, which now sits at A$4.846. At its intraday low, the stock tested the 30-day SMA at A$4.76 before finding support and trimming losses into the close, a potentially important sign.

Despite the weekly dip, September remains solid, with Telstra shares up 2.36% month to date, a figure that stands in sharp contrast to the S&P/ASX 200, which has fallen back 4.53% over the same period. That near seven-percentage-point gap in relative performance tells a story about where capital has been flowing during one of the more turbulent stretches for Aussie markets this year. It is also worth noting that even with September’s outperformance factored in, TLS still trades approximately 13.78% below its mid-May highs, a reminder that the stock has meaningful ground to recover before it can be described as firing on all cylinders.

Driving Recent Gains in TLS

There are various reasons why Telstra has held up better than most of its ASX peers this month, and the most immediate of those is the company’s active on-market share buyback program. Daily ASX filings have shown Telstra repurchasing between approximately 1.92 million and 2.85 million shares per session in recent weeks, with total program repurchases having moved well past the 24 million share mark. The buyback, which forms part of a broader capital management initiative, creates a consistent source of demand in the market that has acted as a practical floor under the share price during periods of broader selling pressure.

Beyond some support from the buyback, there has been a sharp shift in risk appetite across the market, prompted a rotation away from cyclical and growth-oriented names toward defensive, income-generating blue chipslike Telstra. The company recently lifted its annual dividend by 10.5% to A$0.21 per share, translating to a yield of approximately 4.35% on an unfranked basis. For markets reassessing the risk-reward of higher-beta positions in an environment where bond yields remain elevated, that kind of reliable, utility-style income stream carries genuine appeal.

The Setup From Here

From a technical standpoint, the week’s close below the 50-day SMA at A$4.846 introduces a note of caution. That level now represents near-term overhead resistance, and markets will be watching whether TLS can reclaim it in the sessions ahead or whether the break lower invites further selling. The intraday recovery from the 30-day SMA at A$4.76 is an encouraging signal that demand remains present on weakness, but momentum has clearly softened after three weeks of gains.

Looking to analysts for clues, and the average price targets at A$5.01 range, implies  upside of roughly 5% from here. For those focused primarily on income rather than capital growth, the yield proposition remains intact, but for those seeking a material jump in growth, the case is less clear.

Telstra enters the final stretch of September having demonstrated genuine resilience in a difficult market, with its buyback program and dividend credentials providing a solid foundation. It’s also worth remembering that this is a stock that remains 13.87% off it’s mid May high close, and 1.85% lower YTD, so it has been far from plain sailing. Bulls will want to see the stock reclaim key technical levels in the near term, against what appears to be an increasingly challenging macro backdrop.

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