Vedanta's shares went up 47 per cent from July low of Rs 206.10, before turning rangebound. Technical analysts said momentum traders can buy the stock above Rs 320 -- 325 levels, while positional traders can consider accumulating it in the Rs 290 -- 300 range for the targets of Rs 365 -- 385 levels. The levels of Rs 275 -- 290 are expected to act as a key support for the scrip, analysts said.
Independent Analyst Manish Shah said that the stock has been trading in a band of Rs 320 -- 275 for the last several weeks and the price action within the band shows the formation of an Ascending Triangle pattern. There could be more coiling'' within the range as prices are still within an Ascending Triangle pattern, he said.
Bollinger bands are showing a contraction of volatility. We can't eliminate it completely, so the chances of prices showing a cascading down move are minimal. Patience is required in such a situation. The range-bound action seems to be a pause within an ongoing uptrend, according to Shah.
Shah said a decisive high-volume breakout is needed. For traders who are willing to hold for several weeks, they should accumulate stock within Rs 290 -- 300 range. For traders looking for a jump above Rs 320, it is necessary to buy a momentum spurt. The price could rally towards 365 -- 370 over the next 3 -- 6 months. Stops should be kept below Rs 275, he said.
Santosh Meena of Swastika Investmart said there was a strong tussle between the bulls and bears at an important juncture. Vedanta is moving in an upsloping channel formation, where the 50 DMA is acting as immediate and strong support, but the 50 per cent retracement of the previous fall at Rs 325 is acting as a critical hurdle.
He said it needs to reach the Rs 325 level to gain any meaningful strength.
If it takes out the Rs 325 mark, then it is likely that it will go towards Rs 380 level. The 50 DMA around Rs 290 is an immediate support. It may continue its corrective phase, where Rs 273 255 will be the next support levels, Meena said.
Osho Krishan, Senior Analyst at Angel One said Vedanta is gradually surging upwards after the July month lows of Rs 180 odd zone. The stock is well above its major exponential moving averages on the daily chart, indicating inherent strength in the counter, he said.
The stock is consolidated in a narrow range of Rs 290 -- 305 odd zone adjusting dividends and any decisive breakthrough from the mentioned range could trigger the next rally in the counter in the near future, he said.