Investors with medium-term perspective can consider buying the stock of Dish TV India (Rs 65.4). Ever since bottoming out in October 2008 at Rs 11.7, the stock has been on a long-term uptrend. However, following a corrective decline from its July 2011 peak of Rs 94, the stock found support at its long-term base level at Rs 58 in December. After moving sideways around this support, the stock formed a strong floor. Twin supports at Rs 58, a long-term uptrend line and key support cushioned the stock and later it started moving higher triggered by positive divergence in daily moving average convergence divergence indicator. Further, we observe the formation of a falling wedge pattern between in the stock between late November 2011 and early January 2012. Last week, the stock advanced almost 11 per cent accompanied by extra-ordinary volume. It has also conclusively broken out of the above mentioned pattern. The stock is hovering above its 21- and 50-day moving averages. The daily relative strength index has entered in to the bullish zone and weekly RSI has entered in to the neutral region from the bearish zone.
The daily MACD has signalled a buy and is on the brink of entering in to the positive territory. Its daily price rate of change indicator is featuring in the positive area implying buying interest. We are bullish on the stock from a medium-term perspective. We believe that Dish TV has the potential of trending higher and reaching our price target of Rs 78 in the medium-term. However, we don't rule out a minor pause or sideways movement at around Rs 72 while trending higher. Investors with medium-term perspective can consider buying the stock with stop-loss at Rs 58.
Follow up – Ess Dee Aluminium
(Rs 147.1)
After moving higher to an inter-week high of Rs 159.8, the stock retreated and closed the week almost flat. We re-affirm our medium-term bullish outlook on the stock with price target at Rs 180 and stop-loss at Rs 132.
(This recommendation is based on technical analysis. There is a risk of loss in trading.)