Varun Beverages shares showing signs of recovery, right time to buy?

Shares of Varun Beverages are showing some recovery on the technical charts, leaving investors guessing if they should enter the stock or keep sitting on the fence.  Varun Beverages stock has crossed the key resistance mark of Rs 445 today, around which prolonged movement could take it to higher levels. 

Amol Athawale, VP-technical Research, Kotak Securities believes if the stock manages to trade above Rs 445, it could bounce back to the Rs 468–475 range.  

On similar lines, A R Ramachandran, SEBI registered Independent analyst says, "Varun Beverages stock price is bearish with next support at  Rs 409. Only a Daily close above the resistance of Rs 442 could  lead to a target of Rs 475 in the near term."

Meanwhile, in the current session, the stock was trading on a flat note at Rs 449.40 on BSE. Market cap of the firm rose to Rs 1.51 lakh crore. A total of 0.71 lakh shares of the firm changed hands amounting to a turnover of Rs 3.18 crore. 

Varun Beverages shares are trading higher than the 5 day, 10 day but lower than the 20 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages.

The FMCG stock clocked gains of 21% in two years and rose 106% in three years. 

The stock is down 31% this year and fallen 23.71% in a year, reflecting short-term correction in the stock. 

Shitij Gandhi, Sr Research Analyst (Technicals), SMC Global Securities said, "Unless the stock reclaims the Rs 480–500 resistance zone, the broader outlook remains bearish. A decisive break below the Rs 430 support zone could open the gates for further downside toward Rs 400 or lower."

Amol Athawale, VP-technical Research, Kotak Securities adds. "Conversely, as long as it remains below Rs 445, the weak sentiment is likely to persist. On the downside, the stock could slip to the Rs 425–415 levels.

Osho Krishan from Angel One said, "Any further deterioration could adversely affect the near-term outlook. Conversely, resistance levels are established within the range of Rs 465 to Rs 500, which should be monitored in the immediate future."

Jigar S Patel from Anand Rathi said, "Support will be at Rs 420 and resistance at Rs 460. A decisive move above the Rs 460 level may trigger a further upside of Rs 480. The expected trading range will be between Rs 420 to Rs 480 in the short-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.