Vedanta shares are up 100% this year, overbought on charts; time to book profit?

Shares of Vedanta Ltd have gained 146% from their 52-week low in a year. The metal and mining stock, which fell to its 52 week low of Rs 211.25 on October 26, 2023 rose to a high of Rs 520.55  in the current trading session. The stock is trading near its record high of Rs 523.60 reached on September 30, 2024. Vedanta shares are overbought on charts indicating there are more buyers than sellers for the metal and the mining major. Its RSI stood at Rs 74.1. 

In the current session, the stock was trading 1% lower at Rs 510.50. Market cap of the firm slipped to Rs 1.99 lakh crore. A total of 11.17 lakh shares of the firm changed hands amounting to a turnover of Rs 57.57 crore on BSE. 

Vedanta shares have a one-year beta of 1.2, indicating high volatility during the period.  In terms of returns, the stock gained 99% in 2024 and rose 122% in a year. In five years, the stock has risen 255%. The large cap stock is trading higher than the 10 day, 20 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages signaling the stock is trading in bullish zone.

The stock will be in focus next week as the board would consider fourth interim dividend for FY25 on Tuesday, October 8. 

AR Ramachandaran from Tips2trades said, "Vedanta stock price is bearish & also overbought on the Daily charts with strong resistance at Rs 524. Investors are advised to keep booking profits as a Daily close below support of Rs 506 could lead to target of Rs 461 in the near term."

Mandar Bhojane, Equity Research Analyst at Choice Broking said, "Vedanta presents an appealing buying opportunity with a price target of Rs 500 and Rs 550, provided that appropriate risk management measures, such as a stop-loss at Rs 430, are in place."

Jigar S Patel from Anand Rathi Securities has advised investors to book profit. Fresh buying should be avoided.

"At this point, Vedanta appears to be highly overextended because it is trading significantly above all key exponential moving averages (EMAs) such as the 21, 50, 100, and 200-day EMAs. This indicates that the stock's price has surged well beyond its typical trend, suggesting that it may be due for a "mean reversion," where the price could potentially pull back to align more closely with its average levels. Such a deviation makes the stock more susceptible to a correction. Therefore, investors are advised to avoid taking new long positions at the moment, as the risk of a pullback is heightened. For those who have already bought, it’s recommended to book profit in the zone of Rs 515-525. Support is expected near Rs 485 following by  Rs 470 and resistance is seen near Rs 525 followed by  Rs 530 for short-term," said Patel. 

Vedanta Ltd is a subsidiary of Vedanta Resources Ltd and has operations in oil and gas, zinc, lead, silver, copper, iron ore, steel, and aluminium and power across India, South Africa and Namibia.