Varun Beverages shares hit record high, overbought on charts; here are price targets for short term

Shares of Pepsico bottler Varun Beverages Ltd hit their record high amid correction in the broader market today. Varun Beverages shares gained 1.25% to a high of Rs 1482 against the previous close of Rs 1463.70 on BSE. The stock touched its all-time high a day after the company announced signing of an exclusive deal with PepsiCo to manufacture and pack 'Cheetos' in Morocco.

The company's subsidiary Varun Beverages Morocco SA inked an exclusive snacks appointment agreement with Premier Nutrition Trading L.L.C. Dubai, subsidiary of PepsiCo Inc, for the manufacturing and packaging of Cheetos in Morocco.

A total of 0.19 lakh shares of the firm changed hands, amounting to a turnover of Rs 2.85 crore on BSE. Market cap of the firm rose to Rs 1.91 lakh crore. The stock has a one-year beta of 0.2, indicating very low volatility during the period.

The stock rallied 381% in two years and rose 125% in the last one year. Over three years, Varun Beverages shares have climbed 546% . The stock has a PE ratio of 93.20 against the sector PE of 107.14.

In terms of technicals, the relative strength index (RSI) of Varun Beverages stands at 80.3, signaling the stock is trading in the overbought zone. Varun Beverages shares are trading higher than the 5 day, 10 day, 20 day, 50 day, 100 day, 200 day moving averages.

Gaurav Bissa, VP, InCred Equities said, "Varun Beverages has been in a strong uptrend with constant formations of higher highs and higher lows on the weekly charts. It recently witnessed a swing breakout above 1380 which pushed it towards 1500 levels. The momentum indicators remain stable on the long term charts suggesting the trend is likely to be strong and declines are expected to be limited. While a fresh buying opportunity is not visible at the current levels, investors who have bought the stock earlier can hold for Rs 1700 levels with trail stoploss at Rs 1350."

Abhijeet from Tips2Trades said, "Varun Beverages is slightly bullish but also very overbought on the Daily charts with next resistance at Rs 1496. Investors should book profits at current levels as daily close below the support of Rs 1442 could lead to a target of Rs 1310 in the near term."

Varun Beverages is a beverage company. It operates franchisee of PepsiCo. The company produces and distributes a range of carbonated soft drinks (CSDs), as well as a large selection of non-carbonated beverages (NCBs), including packaged drinking water sold under trademarks owned by PepsiCo.

Disclaimer: Business Today provides stock market news for informational purposes only and that should not be construed as an investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

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