Top/Down Take: Vodafone Idea Cellular

First, let's start at the asset class level with the Nifty 500 which is the broadest measure of India's stock market we have. Prices have recovered well off their March lows and have approached long-term resistance near 9,900. Additionally, the 200-day moving average is flat, showing that the long-term trend is sideways and suggesting that a breakout to new all-time highs is unlikely on the first attempt.

Click on chart to enlarge view. 

Next, let's take a look at the industry using an equally-weighted index we constructed in May when we first discussed our positive outlook for the Telecom space. Prices broke above resistance near 74 in June and have continued higher since then. This continues to suggest that prices have completed a bearish to bullish trend reversal and that we want to be erring on the long side of the Telecom industry.

And relative to the Nifty 500, this custom telecom industry index has one more logical area of potential resistance ahead of it near 0.010, but from a structural perspective it has reversed its downtrend.

Now, let's get into Vodafone Idea Ltd. with the chart we shared for Subscribers on the initial breakout in June, as well as the subsequent retest in July.

On the weekly chart, we see momentum diverging positively as prices built a 10-month base from August of last year until they finally broke out in June 2020. This bearish to bullish trend reversal is clearly intact and will remain so as long as prices are above 6.75, with an initial target back at former support near 21.00.

And from a more tactical perspective, a breakout above 13.80 would signal further short-term upside that targets 20.60 on the upside...nicely corresponding with our longer-term target near 21.

And on a relative basis, the stock has also shifted from a downtrend to an uptrend. As long as prices are above 0.095, then the bias is to the upside and we can expect continued outperformance.

And we see a similar story in the stock relative to the Nifty Next 50 Index, which is again confirmation of improving relative strength across the board.

To conclude, our bullish outlook towards Vodafone Idea Cellular (and the Telecom industry) which began in May/June remains intact and has strengthened since then.

Equities as an asset class are in a sideways/upward trend and Vodafone Idea Cellular is in a strong industry and is an outperformer within that industry and market-cap segment.

All signs are pointing higher, so we want to own this bearish to bullish trend reversal and continuing to participate in the upside ahead.

From a weekly chart perspective, any weakness back towards 6.75 should be viewed as a buying opportunity with a longer-term target near 21.

If you'd rather approach it from a more tactical perspective, then we want to be buying strength above 13.80, with a target near 20.60.

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Allstarcharts Team