Zee Entertainment Enterprises gives triangle breakout

After registering a high of Rs 238.20, the stock of Zee Entertainment Enterprises Limited has entered into a consolidation phase, which resulted into the formation of a symmetrical triangle pattern. Due to the consolidation in a narrow range for over a month, the Bollinger band, which was developed on the basis of the last 20 days’ volatility, has contracted significantly.  

However, on Tuesday, the stock has given a symmetrical triangle pattern breakout on the daily chart. Further, this breakout is supported by a robust volume of nearly double the 50-day average volume, indicating a strong buying interest by the market participants. The 50-day average volume was 1.83 crore, while today, the stock has witnessed a total volume of 3.19 crore. In addition to this, the stock has formed a sizeable bullish candle on the breakout day, which adds further strength to the breakout.  

Talking about the indicators, the 14-period daily RSI is currently quoting at 66.37. The daily RSI is in a rising mode and it is trading above its 9-day average. The fast stochastic is also trading above its slow stochastic line. Moreover, on the daily timeframe, ADX is 11.22, which suggests that the trend is yet to be developed. The directional indicators continue in the ‘buy’ mode as +DI continues above –DI.  

Going ahead, on the downside, an important support for the stock is placed at the level of Rs 226 while on the upside, immediate resistance is seen at Rs 261, followed by Rs 268.50.  

On Tuesday, the stock of Zee Entertainment Enterprises Limited closed at Rs 242.90 per share, surged by nearly 7 per cent. The stock opened at Rs 228 per share and hit an intraday high of Rs 247.70 and a low of Rs 227.50 per share on NSE.