Avoid Vodafone Idea as charts show 'Death Cross' pattern; support at Rs 5

Shares of Vodafone Idea on Wednesday tumbled 3 per cent following its parent company; Vodafone Group Plc indicated that the telecom major has no interest in rescuing its Indian joint venture. It also announced to have valued its investment in VIL (Vodafone Idea Ltd) to to nil.

The Vodafone Idea shares have plunged 10 per cent since the start of the current year, post tumbling close to 48 per cent last year.

Meanwhile, Vodafone Group Plc’s new CEO has unveiled a plan to revive growth at the telecom giant, pledging to slash jobs and simplify the company’s corporate structure.

The company will cut about 11,000 roles across the business over the next three years, work to turn around its German market and start a “strategic review” of its Spanish unit, the Newbury, England-based company said in a statement Tuesday. Last month, Bloomberg reported Vodafone had attracted takeover interest for its operations in Spain. READ ABOUT IT HERE

Here’s the technical outlook for Vodafone Idea shares amid the declaration of Vodafone Group Plc

Vodafone Idea Ltd (IDEA)

Outlook: Trend remains weak, better to avoid

Shares of Vodafone Idea are trading beneath the crucial support of the 200-day moving average (DMA) since April 2022, with a strong negative bias. 

Moreover, there is a “Death Cross” formation on the weekly chart, which categorically indicates that an engulfing of a bearish sentiment.

The broader trend for the shares of Vodafone Idea continues to remain negative, and unless the stock succeeds in displaying stability over the 200-DMA set at Rs 7.85, the trend would not brace bulls. 

Immediate support for the short-term trading exists at Rs 6 and then at Rs 5 levels. And technically, it’s more feasible to stay aside unless the stock reveals signs of revival in its trend. 

While considering a long-term perspective, monthly chart undoubtedly expresses a barrier of Rs 8.64, which is its 50-monthly moving average (DMA) that the stock in unable to conquer since early 2016. The trend is fragile, until this moving average is conquered. CLICK HERE FOR THE CHART