The analyst signals caution but sees potential for a rebound if critical support is maintained.

Hindustan Zinc shares dropped over 6% on Wednesday following parent company Vedanta’s sale of a 1.6% stake in the firm.

At the time of writing, Hindustan Zinc stock was down 5.8% at ₹458.3.

Vedanta sold 66.7 million shares to institutional investors via an accelerated bookbuild, raising approximately ₹3,028 crore, as per an official press release issued on Wednesday.

Vedanta will use the proceeds to support its ongoing demerger plans by reducing debt and improving financial flexibility for its future standalone entities.

On a technical front, SEBI-registered analyst Dhwani Patel said the bias for the stock remains cautiously bearish in the short term.

The stock witnessed a significant correction after reaching a recent swing high of ₹540.70, retracing to near the 50% Fibonacci level, she added.

The pullback places it near its 200-day exponential moving average (EMA). At the same time, the 20-day and 50-day EMAs continue to hover above the current price, signaling short-term weakness, though long-term support remains intact.

The analyst stated that the upward-sloping trendline has provided dynamic support over the past few months.

Patel added that Hindustan Zinc shares rebounded from the trendline in May and are now retesting it, with the stock’s next move likely hinged on it.

From a momentum perspective, the directional movement indicators (+DI, -DI, and ADX) still reflect trend strength, with the ADX above 30, which is often viewed as a sign of a strong underlying trend.

However, the recent crossover of -DI above +DI signals that bearish pressure is currently dominant, Patel noted.

If the key ₹440–₹450 support zone holds, it may trigger a fresh rebound, but a breakdown below it could lead to further downside toward ₹412 or even ₹388, according to Patel.

Retail sentiment for Hindustan Zinc stock on Stocktwits turned ‘bullish’, amid ‘high’ message volumes. It was among the top five trending Indian stocks on Stocktwits.

HINDZINC sentiment and message volume as of June 18, 14:35 pm IST. Source: Stocktwits.

 Hindustan Zinc shares have added 3.4% gains year-to-date (YTD).

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