Vedanta shares at 52-week high after demerger, analysts still bullish; here's why

Vedanta share price: Shares of Vedanta Ltd have rebounded 22% since the demerger became effective on May 1 this year. The stock of the Anil Agarwal-led metal and mining major fell to 289.50 on NSE on April 30, signalling a 62.58 per cent fall from its previous close at Rs 773.60. A rise in the global metal prices, crude/oil and gas policies and demand outlook from China triggered a rally in the Vedanta stock in the short term. 

The bull run in the Vedanta stock took it to a fresh 52 week high of Rs 304.70 on May 14. Vedanta shares have gained 22% in two weeks and 53% this year. 

However, shares of Vedanta are oversold on charts with a RSI of 28.2. An RSI below 30 signals a stock has more sellers than buyers.   

The metal major's shares trade 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. In the previous session, Vedanta stock slipped 2.30% to low of Rs 331.10. Market cap of the firm slipped to Rs 1.29 lakh crore. A total of 27.85 lakh shares of the firm changed hands amounting to a turnover of Rs 91.72 crore. 

With technicals suggesting bullish momentum in the short term, here's a look at what analysts said on the outlook of Vedanta stock. 

Hitesh Tailor, Technical Research Analyst at Choice Broking said "Vedanta continues to maintain a strong bullish structure on the daily time frame after giving a decisive breakout above the previous swing high zone of Rs 300. Post breakout, the stock witnessed strong follow-up buying momentum and surged towards the Rs 340 mark, indicating sustained strength in the ongoing uptrend. For short-term traders, the overall setup remains positive as long as the stock holds above the Rs 320–Rs 300 support zone. Any dip towards support levels may attract fresh buying interest. However, a sustained move below Rs 300 could weaken the near-term bullish structure and may trigger some corrective decline."

Rajesh Bhosale, Technical Analyst at Angel One said, "It has been observed that declines towards the 20 DEMA are consistently getting bought into, with this average now placed around the Rs 300 mark, thereby acting as a strong support zone. Any dip towards this level could be considered as a buying opportunity. On the upside, considering the reciprocal retracement setup, the stock has the potential to move towards the Rs 380– Rs 400 zone from a medium-term perspective of 4–6 months."