Zee-Sony merger: Tech charts suggest 35% upside for Zee Entertainment stock

Sony Pictures Networks India Private Limited (SPNI) and Zee Entertainment Enterprises Ltd (ZEEL) on Wednesday announced that they have signed definitive agreements to merge ZEEL with and into SPNI and combine their linear networks, digital assets, production operations and program libraries. 

The agreements follow the conclusion of an exclusive negotiation period during which ZEEL and SPNI conducted mutual due diligence. After closing, the new combined company will be publicly listed in India. The closing of the transaction is subject to certain customary closing conditions, including regulatory, shareholder, and third party approvals. READ MORE HERE

Following the development, Zee Entertainment slipped 5 per cent at Rs 332.75 on the BSE in Wednesday’s intra-day trade. CLICK HERE FOR STOCK PERFORMANCE

So, what's in store for Zee Entertainment stock? Is more downside likely in the next few days. Here's what the technical charts suggest.
 

Zee Entertainment Enterprises Ltd (ZEEL)
Likely target: Rs 400 and Rs 475
Upside potential:  18% to 35%

The shares of Zee Entertainment Enterprises have managed to hold above their 200-day weekly moving average (WMA), currently placed at Rs 313 levels. From a broader perspective, unless a decisive breakdown does not happen now, the bullish bias will remain and may see interest from the market participants over the next few sessions. 

In addition, the stock has experienced an accumulation near Rs 280 levels in the last two months. So if in case it fails to hold 200-WMA, the next major support area is Rs 280, as per the daily chart.

On the higher side, the resistance comes in at Rs 400 and Rs 475 levels from a medium-term perspective. The overall trend looks highly bullish and any correction can be used to add to positions from a long-term perspective. CLICK HERE FOR THE CHART