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Given the current market volatility, investors with a contrarian view can buy the stock of Zee Entertainment Enterprises at current levels. On Wednesday, the stock gained 5 per cent accompanied by above average volume, breaking out of a narrow sideways in the band between ₹325 and ₹365 on the upside.
The stock was on a sideways consolidation phase for the past two months. Key medium-term support in the ₹320-325 band had arrested the stock’s decline in mid-May 2019. Since then, the stock has been moving sideways with an upward bias. The stock had recently breached its 21- and 50-day moving averages and hovers well above them.
The daily relative strength index has entered the bullish zone from the neutral region and the weekly RSI features in the neutral region. Further, the daily price rate of change indicator hovers in the positive territory implying buying interest. With the recent breakthrough of a key resistance at ₹365, the stock has potential to trend upwards and test resistances at ₹395 and then ₹402 in the coming weeks.
Traders with a short-term view can buy with a stop-loss at ₹371.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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