markettrend766
27-11-2008, 06:42 AM
We recommend a sell in Zee Entertainment Enterprises from a short-term perspective. It is evident from the charts that the stock has been on medium-term down trend from September high at Rs 239. Moreover, the long-term trend is also down since its all-time high at Rs 362 recorded in October 2007.
However, the stock recently found support at around Rs 100 and made a corrective up move to the resistance level at Rs 125. After encountering twin resistance at Rs 125 (a resistance and medium-term down trendline), the stock resumed its downtrend by plummeting 6 per cent on November 26.
We also notice formation for bearish engulfing candlestick pattern at this resistance level, indicating bearish reversal. The daily relative strength index has re-entered the bearish zone from the neutral region and the weekly RSI is featuring in this zone. Considering that the medium-term down trendline continues to be intact, we are bearish on the stock. We expect the stock’s decline to continue until it hits our price target of Rs 102 in the forthcoming trading sessions.
Traders with short-term perspective can sell the stock while maintaining a stop-loss at Rs 120.
However, the stock recently found support at around Rs 100 and made a corrective up move to the resistance level at Rs 125. After encountering twin resistance at Rs 125 (a resistance and medium-term down trendline), the stock resumed its downtrend by plummeting 6 per cent on November 26.
We also notice formation for bearish engulfing candlestick pattern at this resistance level, indicating bearish reversal. The daily relative strength index has re-entered the bearish zone from the neutral region and the weekly RSI is featuring in this zone. Considering that the medium-term down trendline continues to be intact, we are bearish on the stock. We expect the stock’s decline to continue until it hits our price target of Rs 102 in the forthcoming trading sessions.
Traders with short-term perspective can sell the stock while maintaining a stop-loss at Rs 120.