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.
