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The stock of DEN Networks, a leading cable TV distribution company, did a volte-face after plunging to its 52-week low at Rs 110 early this month. The stock’s reversal was backed by a positive divergence in the weekly relative strength index and daily moving average convergence indicator. Since then, DEN has been on an uptrend.
On Thursday, it gained 6.6 per cent with good volumes. This surge powered the stock past its immediate key resistance as well as 50-day moving average at Rs 145. The stock’s relative strength index on the daily chart has entered the bullish zone from the neutral region implying upward momentum. The daily price rate-of-change indicator is indicating buying interest. The stock’s short-term outlook appears to be bullish.
Taking a contrarian stance on the stock, we are bullish on it from a short-term perspective. The stock can extend its current rally to the price target of Rs 155 and then Rs 158 in the ensuing trading sessions. Traders with a short-term perspective can buy DEN with a stop-loss at Rs 145.
( Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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