Contrarian Bet - Looks like stock ready to Rock !!!!!!

SUNTV : SUN SET TO RISE !!?!!! 

I hope all of the readers are doing well and safe in this pandemic scenario.

This is my 41st blog post and I believe the readers are getting Value and to learn new aspects of the Technical analysis and new ways to read the price action. Before going on to the stock analysis, I would like to thank all the readers for the support and I am so happy to share that I have managed to cross a milestone of 1 Lakhs view in a short span of time. Thank you again and keep sharing your love and support :)

This week the stock I have selected is SUNTV which has been underperforming for the last couple of years and I believe the stock is at the cusp of a new beginning and set for a trend reversal. The detailed analysis has been shared below.

The chart attached below is the weekly chart of SUNTV which highlights the stock has been under pressure from Jan 2018 - March 2020, where price experienced a disastrous decline from 1100 to 260 levels. The price printed a low around 260 in March 2020 and post then till date, the price has managed to recover about 30-35% of its entire fall from 2018.

The process has formed a wide Bullish inverse Head and Shoulder pattern and is at the cusp of the breakout. The follow-up in the coming sessions will provide confirmation of the price pattern. Inverse Head and Shoulder pattern are generally considered bullish reversal pattern and mostly forms at the bottom of the bearish trend. The momentum Indicator RSI, has registered Range swift to higher readings which throws a bullish signal and compliments the bullish view on price.

The next chart attached below is the Ratio chart of Nifty Media and Nifty. It is evident from the chart that the Ratio chart has been declining for the past couple of years. The underperformance seems about to get over and we see a sign of reversal hereon. At the bottom, the Ratio has formed a Morning Star Candlestick pattern with positive follow-up action. Also, RSI has developed bullish divergence and has given breakout from Bullish inverse Head and Shoulder pattern which compliments bullish view on price.

The third chart attached is the Ratio chart of SUNTV/NIFTY.  It is evident from the chart that the Ratio has dropped to the key support zone and has been consolidating near the support for the past couple of weeks. The Ratio chart suggests that if the Ratio takes support and climbs higher, SUNTV will outperform the Nifty going forward. RSI as well been throwing bullish signals as we see RSI has developed bullish divergence against the Ratio and inching higher from the support zone.

Thus, from the above Technical Studies, I believe SUNTV shall rally higher and outperform the Benchmark index in the coming weeks and months. The view discussed above if unfolds on the expected line I believe the stock has the potential to climb higher towards 620-680-750++ in short to medium term. On the downside, strong support is placed near 520-490 levels. 

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