VEDANTA LTD

VEDANTA LTD

Technical View

  • The metal index recently witnessed its deepest cut of 14% since February 2023, during which it significantly surged by 95%. The index retraced below the 100 DMA and reclaimed the average line in a brief period, indicating potential signs of a shakeout. With this, the average line now acts as immediate support, and we anticipate a continuance of the pullback rally in the metal index.
  • The price action of VEDL has shifted into a broader sideways range after climbing over 100% from the lows in March 2024.
  • This indicates sustained interest from astute investors, thereby restraining potential downturns. The 400-405 zone has proven to be a robust demand area, with the price action experiencing a technical rebound after a retest.
  • In the current instance, the price action has formed a mini double-bottom pattern within the consolidation range, indicating a trend reversal.
  • VEDL has exhibited improving relative strength compared to the 50-index and has shown reduced volatility over the last 50 trading sessions, signalling a lower probability of sudden large downturn movements, which is a positive indicator.
  • The RSI across daily and higher timeframes are trading well above their medians, indicating garnering of further thrust in the price momentum.
  • With 50 daily MA acting as immediate support, we recommend buying VEDL with a target price of 535 and maintaining a stop loss at 436.
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