VEDANTA Trend AnalysisWill VEDANTA be the next ADANI Enterprises?
Broader outlook says it broke out of the decade long sideways trend and is heading for a retest before a massive upside.
A clear Head & Shoulder pattern is visible in daily timeframe , as per the pattern the technical target is around 190 level which also lies in confluence with trendline support.
Volume shows the participation of strong hands.
Last time strong accumulation happened during Apr 2003-Dec 2005 as highlighted, after that the stock gave a 12X multibagger returns in about 4 years.
Currently we are in a strong accumulation phase when company is diversifying its sector by adding semiconductor and display manufacturing to the commodities only segment.
After this accumulation phase we can expect similar returns in 4-5 years.
As the price is heading towards decade old price territory, here are the key fundamental aspects worth considering:
Sales has increased 13 times,
Operating profit has increased by about 9 times,
Assets have increased by about 27 times,
Cash flow has increased 10 times.
Huge capital is allocated for CAPEX.
For exact figures, kindly refer www.screener.in
Vedanta will finalize a location for its $20 billion semiconductor and display plants in India by this month end and expects to roll out the first chip product in two years, its chairman Anil Agarwal said.
He also said they were manufacturing glass and optical fiber. So, it was natural for them to move into semiconductors.
Taiwan based Foxconn is their technical partner for plant setup and operation.
India's government will extend fiscal support of up to 50% of a project's cost to eligible display and semiconductor fabricators. This will give tailwind to semiconductor sector.
Good time to accumulate is at the retest of trendline support around 190 level.
Long term positional target should be a minimum 10X in 4-5 Years.
Will update the exact targets for short, medium and long term as chart unfolds in future.
Do your own due diligence before taking any action.
Peace!!
