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We recommend a buy in the stock of Reliance Broadcast Network from a short-term perspective. It is seen from the charts of the stock that since encountering resistance at Rs 120 in November 2010, the stock was on a medium-term downtrend. It then found support around Rs 61 (a key long-term support level) in early February. The stock subsequently changed its direction triggered by positive divergence in daily moving average convergence divergence.
The stock took support from its key level at Rs 61 and rebounded in mid-May this year. Since then, the stock has been on a short-term uptrend. On Thursday, the stock skyrocketed nine per cent accompanied by good volume, emphatically breaking through its down trendline that was in place since last November. Moreover, the stock has breached its 21- and 50-day moving averages.
The daily relative strength index has entered the bullish zone and weekly RSI is inching higher in the neutral region. Daily MACD is on the verge of entering the positive territory from the negative.
We are bullish on the stock for a short-term horizon. We anticipate that the stock will move higher until it reaches our price target of Rs 77.5 or Rs 80 in the days ahead. Traders can buy the stock with stop-loss at Rs 73.
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