Network 18

Investors with a medium-term perspective can consider buying the stock of Network 18 Media and Investments (Rs 123.6). The stock's downtrend that commenced from an all-time high of Rs 629 in May 2007 was arrested in March 2009 around Rs 60. It was on a sideways consolidation phase between July 2009 and March 2010, forming an inverse head and shoulders pattern with neck line at Rs 110. This pattern is a bottom reversal pattern, signifying change in major trend. Since November 2009, the stock has been on an intermediate-term uptrend. The stock conclusively broke out of the neckline of the inverse head and shoulders pattern at Rs 110 by gaining 26 per cent last week. We observe an expansion of volume which validates the break-out.

Furthermore, the stock is trading well above its 21-, 50-and 200-day moving averages.

Both the daily and weekly relative strength indices have entered in to the bullish zone, reinforcing the bullish momentum. Signalling a buy, the daily moving average convergence and divergence indicator is featuring in the positive territory. The weekly MACD is steadily rising in the positive territory.

Our medium-term forecast on the stock is bullish. We believe that it has the potential to trend higher to the pattern price target of Rs 150 in the upcoming weeks. Investors can consider buying the stock with stop-loss at Rs 110. Short-term investors can also buy while maintaining stop-loss at Rs 135 and target of Rs 118.

Follow up- Amtek Auto (Rs 194.6)

The stock climbed 2.5 per cent from our recommended level and is in the process of heading higher towards our short-term price target. We reiterate our medium as well as short-term bullish outlook on the stock. Investors can consider buying the stock with the targets and stop-loss mentioned last week.

via BL