Medium Term Investment: NDTV

New Delhi Television Ltd. [NDTV]

BSE: 532529

Entry Price: 425 – 440

Media sector as a whole has been buzzing hot in recent times. One of the stocks that witnessed a razor sharp rise in the last few weeks and caught attention of the traders and investors was NDTV. The latest news is that the company has plans to take its Hindi channel NDTV imagine on air to showcase programs which will include family soaps, music based soaps etc. With the overall outlook on the media sector improving well, we can seen this one going up further. Now if this is a case then can the technical signals on the chart be far behind? On the monthly chart, we find that the recent swift moves have pushed the stock to an all time high. This kind of development in the price suggests that the stock has good intentions of resuming its trended run once again in the future. Tracking back the past history, one would see that the stock failed to perform well after it got listed in May 2004. Prices tumbled sharply from the high of around 125. Finding its feet around 77.50, the stock to revive well from lower levels and thus began its era of a long term uptrend. The trend that developed here was pretty steady and by registering consistently higher highs which led prices all the way to around 454 in July 2007. Owing to the overstretching of the trends, profit booking emerged in this counter and that led the stock to top out. The decline that took off from here dragged the scrip down to around 287 in August 2007. Near this region, prices met a good support of the trend and then moved into a consolidation phase. In this period, prices were seen oscillating within 325-391 ranges over a period of time.

Trends during this range bound phase were pretty swift on either side and thus gave a good opportunity to swing traders and short-term investors to earn good profits. The recent rising leg from low of 332 that began in the end of November 2007, followed by the current month’s strong rise was a nice attempt to overcome its ongoing sideways trend. Prices have moved above the 391 levels and are seen holding well above it. This has till now led to the formation of nice full body candle near its prior small body candle. Giving a similar monthly closing will lead to beginning of a speedier moves. The momentum readings on the RSI Oscillator has been holding good support of 60 in this consolidation phase and is seen picking up well along with prices. This is a bullish signal and looks like the stock has a bright future ahead. With the prices charged up to move to new highs and positive news flowing in, we recommend investing in this leading broadcaster and producer, from a medium term perspective at current and on declines for the target of 638/830.

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