ZEE Entertainment Limited (ZEEL) has taken a breather near a support level price has shown double bottom. All three RSIDIV indicators are showing divergence. Today morning first candle is above 172 crossing Smoothed HA. Seems a reversal confirmation to me. It has also crossed 50 MA and if holds well there might me recovery/up move till 185 level. However we will bet for a safe target of 177 above with a stoploss of 168. Risk reward doesn’t look good here.
Alternatively, we can take a option strategy by selling 165PE and buying 145 PE down side. In this strategy, I will benefit if the stock doesn’t go below 165 level. But chances of winning are good and we will exit the trade as soon as we are into 50% of max profit.
Follow Up update on 06 Sep:
Target crossed!!
This doesn’t seem to be clear divergence to me. Why are you taking this trade on the basis of divergence?
It’s not always that one has to see clear divergence. I found merit in this trade, primarily because of the following reasons:
ZEEL was nearing its daily support zone
Double bottom on 1 HR chart
Crossing above 50 MA
It made a massive reversal today. 24% up
That is on news of MD removal.
May I know your email address Sir.