Vedanta shares in consolidation mode since March this year; here's the breakout level for upward move

Shares of metal and mining major Vedanta Ltd have been consolidating in a range of Rs 270-290 since February end this year. The stock slipped to these levels from 52-week high hit on January 20, 2023. Currently, the large cap stock is stuck in the grip of bears, according to technical indicators and analysts. Vedanta stock is trading higher than the 5 day, 20 day and 50 day moving averages but lower than 100 day and 200 day moving averages.

The stock traded at Rs 279.70 today against the previous close of Rs 278.60 on BSE. Market cap of the firm stood at Rs 1.03 lakh crore. In a year, the stock is down 7.73% and fallen 9.15% this year. It hit a 52-week low of Rs 206.10 on July 1, 2022.

In terms of technicals, the relative strength index (RSI) of Vedanta stands at 48.9, signaling neither the stock is overbought nor oversold. The stock has a one-year beta of 1.4, indicating very high volatility during the period. The PE ratio of Vedanta stands at 9.93 signaling the stock is undervalued compared to its industry. The PE of the mining industry stands at 14.39.

Commenting on the technical outlook of the stock, Osho Krishan, Sr. Analyst - Technical & Derivative Research, Angel One said, "Vedanta is in a consolidation phase ranging from Rs 270-290 odd levels. On the technical front, the stock is hovering just above its major EMAs (exponential moving averages) on the daily chart, which construes a positive setup for the counter. However, until we witness a range breakout, the trajectory remains sideways."

Gaurav Bissa, VP, InCred Equities said, "Vedanta is trading at middle of range of box pattern with strong hurdle at Rs 440 and support at Rs 205 levels. It is expected to continue witnessing time correction for next few months as fresh trigger will come once it breaches either of the swing levels mentioned earlier. The cues are mixed on daily charts as well where it has been in a narrow range since Feb 2023. The stock will pick up pace once it gives a close above its 200DEMA placed at Rs 295 levels, which can then push it towards Rs 330 levels. Till it does not give a close above its 200DEMA, it is expected to trade in the Rs 260-295 range."

Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher said, "The stock has slipped recently from Rs 340 levels to consolidate near the Rs 270 zone with support maintained near Rs 265 level and tough resistance witnessed near Rs 285-290 zone. A decisive breach above the Rs 290 level is much needed to give a breakout and anticipate for fresh further upward move for initial target of Rs 310-320 levels."

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