Breakout in ZEEL to lift media index up

Nifty Media sector has witnessed a kind of rectangular pattern after a sharp fall from its 52-week and all-time high of 3290, where the index had halted for almost four to five sessions before a fall. Recently, the index broke out of the upper band of a rectangular pattern at 3180 level with justifiable volumes and 14-period RSI reversal from 60-67 levels. However, the index is seen consolidating for almost seven consecutive sessions with lack of major trigger after exuberant results from Nifty Media heavyweight, ZEEL.

Zee Entertainment Enterprises which holds 49 per cent weightage in Nifty Media index posted 2.7 per cent revenue growth in September 2017 quarter while its PAT grew robust at 135 per cent driven by realization from sale of its brand TEN Sports. Going forward, the company is expected to penetrate into international geographies to tie-up with international media brands.

Coming back to the technical analysis of ZEEL, the stock is trailing near its multiple point downward sloping trendline breakout at 550 level. The stock is consolidating below these levels and is waiting for some news based trigger to lift the stock upwards. Currently, the lower volumes and the RSI trailing just below 60 level is restricting the stock from gaining grounds. The stock may show a strong upside in the coming sessions if it breaches the 550 level.