Technical Analysis

Zee Entertainment faces key resistance ahead

Yoganand D | Updated on March 31, 2019 Published on March 31, 2019

Crossing the hurdle in the ₹480-500 range can take the stock to ₹550

Here are answers to readers’ queries on the performance of their stock holdings.

I have shares of Zee Entertainment Enterprises Ltd (ZEEL) at ₹440 each. Should I hold or sell these shares?

Harish Bale

Zee Entertainment Enterprises (₹444.3): Following a long-term uptrend, the stock encountered key resistance in the band between ₹600 and ₹620 in January 2018.

This resistance zone limited the stock’s rally in May 2018 and, thereafter, it began to decline. Since then, it has been in an intermediate-term downtrend. The stock witnessed a sharp plunge in late January this year and breached key supports at ₹420 and ₹320 in a single session and recorded a multi-year low at ₹288. Subsequently, it bounced up, recovering from the oversold territory.

 

 

The stock has been in a medium-tem uptrend since then. But it could face key resistance ahead in the ₹480-500 range, from which it began to decline in early March.

A strong break above this resistance can strengthen the medium-term uptrend and take the stock higher to ₹550.

A further breakthrough of the key medium-term resistance at ₹550 will alter the intermediate-term downtrend and take the stock up to ₹600 and ₹620 levels over the long run.

You can consider averaging the stock in declines, while maintaining a fixed stop-loss at ₹380.

On the downside, the stock has key supports at ₹420 and ₹350.

An emphatic downward break of ₹350 will strengthen the downtrend and drag the stock down to ₹300 or ₹288 once again. Investors with a long-term perspective can also consider holding the stock with a stop-loss at ₹380 levels.

I want to know trend for the stock of Gallant Metal.

Jagadeesh

Gallantt Metal (₹49.7): The shares of Gallantt Metal have been volatile, with very low liquidity in the counter as well. It tends to move from circuit to circuit.

 

 

 

After encountering resistance at ₹65 in November 2018, the stock began to trend downwards. Since then, it has been in a medium-term downtrend. Key resistance at around ₹55 is capping the upside. A strong break above ₹55 will alter the medium-term downtrend and take the stock up to ₹58 and ₹62 over the medium term.

On the other hand, a conclusive fall below the ₹42-45 band will reinforce the downtrend and drag the stock down to ₹40 and ₹36 in the medium term.

Generally, investors with a long-term perspective should avoid buying stocks that have low liquidity and which move from circuit to circuit as they don’t provide clear buying or selling opportunity.

Send your queries to techtrail@thehindu.co.in

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