Vedanta shares can hit Rs 365-385 levels in 3-6 months. Here's the trading strategy

Shares of Vedanta have risen 47 per cent from July low of Rs 206.10, before turning rangebound. Technical analysts said momentum traders can look to buy the stock above Rs 320-325 levels while positional traders can consider accumulating it in the Rs 290-300 range for the targets of Rs 365-385 levels. The levels of Rs 275-290 are expected to act as a key support for the scrip, analysts said.

Independent Analyst Manish Shah said the stock has been trading in a band of Rs 320-275 for the last several weeks and the price action within the band shows formation of an Ascending Triangle pattern. As prices are still within an Ascending Triangle pattern, there could be some more 'coiling' within the range, he said.

"Bollinger bands are also showing a contraction of volatility. Thus, the chances of prices showing a cascading down move are minimal, though we cannot eliminate it entirely. Patience is required in such a type of a situation. Prices are in an uptrend and this range-bound action seems to be a pause within an ongoing uptrend," Shah said.

Shah said a decisive high-volume breakout is needed. For traders who are willing to hold for several weeks should accumulate stock within Rs 290-300 range. For traders looking for momentum spurt 'buy' a breakout above Rs 320. There is potential for price to rally towards Rs 365-370 over the next 3-6 months. Stops should be kept below Rs 275, he said.

Santosh Meena of Swastika Investmart said that there is a strong tussle between the bulls and the bears at an important juncture.  Vedanta, he said, is moving in an upsloping channel formation, where the 50-DMA is acting as immediate and strong support, but the 50 per cent retracement of the previous fall at Rs 325 is acting as a critical hurdle.

It needs to cross the Rs 325 level to gain any meaningful strength, he said.

"If it manages to take out the Rs 325 mark, then it is likely to head towards Rs 380 level. On the downside, the 50-DMA around Rs 290 is an immediate support. Below this, it may continue its corrective phase, where Rs 273/255 will be the next support levels," Meena said.

Osho Krishan, Senior Analyst at Angel One said Vedanta is gradually surging upwards post the July month lows of Rs 180-odd zone. The stock is hovering well above its major exponential moving averages on the daily chart, indicating inherent strength in the counter, he said.

"Simultaneously from the last couple of trading sessions, the stock is consolidating in a narrow range of Rs 290-305 odd zone (adjusting dividends), and any decisive breakthrough from the mentioned range could only trigger the next set of rally in the counter in the near future," he said about the immediate future.

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