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Investors with a short-term perspective can buy the stock of Vedanta at current levels. The stock jumped 12 per cent accompanied by extraordinary volume on Tuesday, breaking above a key resistance at ₹84 as well as the 50-day moving average. This rally provides traders an opportunity to buy it at current levels.
Following a sharp fall in late February and March, the stock recorded a 52-week low at ₹60 in end March and changed direction triggered by positive divergence on the daily RSI and daily price rate of change indicator. Since then, the stock has been in a short-term uptrend.
Key short-term support at around ₹78 and the 21-DMA hovering at this level, had cushioned the stock last week. The stock trades well above the 21- and 50-DMAs.
The daily RSI is on the brink of entering the bullish zone from the neutral region and the weekly RSI has entered the neutral region from the bearish zone. Besides, the daily price rate of change indicator has decisively entered the positive terrain, which signifies buying interest.
The stock currently tests a resistance at ₹89 with an upward bias. Short-term outlook is for Vedanta. It has potential to trend upwards, exceeding the current resistance and reach the price targets of ₹93 and ₹95 in the ensuing trading sessions. Traders can buy the stock with a stop-loss at ₹87.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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