Zee Entertainment

We recommend a sell in Zee Entertainment Enterprises from a short-term trading perspective. It is clearly evident from the charts of the stock that after taking support from its significant long-term support level at Rs 100 during mid November 2008, the stock bounced up. The stock’s medium-term uptrend encountered resistance at Rs 155 in early January 2009.

Subsequently, the stock resumed its long-term downtrend that has been in place, forming lower peaks and lower troughs since October 2007 peak of Rs 362. On January 9, the stock tumbled by 10 per cent conclusively penetrating its medium-term uptrendline and 21-day moving average. The daily relative strength index (RSI) is falling in the neutral region towards the bearish zone and the weekly RSI is already featuring in the bearish zone.

Our short-term forecast is bearish for the stock. We expect the stock’s decline to continue until it hits our price target of Rs 115 in the forthcoming trading sessions. Traders with short-term perspective can sell the stock while maintaining a stop-loss at Rs 136.