Why Zee Entertainment Shares are Falling Today

Zee Entertainment Enterprises is a media and entertainment company engaged in providing broadcasting services. It is one of India's leading media and entertainment companies.

The company's brands include Zee TV, Zee Cinema, Zee Action, and many more.

Zee Entertainment share price (ZEE) is currently trading down by 10% after the bankruptcy court admitted the company under the insolvency resolution process.

Private lender IndusInd Bank has claimed a default of Rs 830.8 million in its plea against the media company.

Shares of the company slumped up to 14% intraday today before recovering some of the losses.

Let's take a look at the company's technical charts to examine whether ZEE is headed for more pain or if it's the other way around.

Since its breakdown from 200WEMA (Weekly Exponential Moving Average), ZEE's share price has failed to sustain above the long-term average.

ZEE Technical Chart

 

With a stellar rally from Rs 165 to Rs 359 in Q42021, the short-term average of 50WEMA witnessed a positive slope but failed to cross above the long-term moving average of 200WEMA.

The weekly chart's death-cross in May 2019 indicated a bearish trend.

The death cross is a bearish technical analysis pattern that occurs when the short-term moving average of 50-period crosses below the long-term moving average of 200-period.

This pattern suggests that the stock or index is experiencing a significant downtrend and that further losses are likely.

Even after the sharp rally in 2021, the stock has failed to sustain above its 200WEMA.

The southward slope of both averages is the prominent sign of bearish momentum.

As per the Dow Theory, the bullish structure of higher high - higher low has been negated signalling the trend reversal.

The trendline (green) breakdown resumes the bearish trend on the charts and signals it's not yet over for the stock price.

The next support is placed at Rs 160 at the previous swing low. If broken, it may accelerate the bearish momentum.

Traders and investors should stay cautious once the support level is taken out.

We say this because ZEE share price has been falling for a long time now and this reason has just added fuel to the fire.

Despite being one of the top media stocks, ZEE continues to face pressure and this time, the insolvency development will likely overshadow the company's merger with Sony.

In December 2021, Sony and Zee signed a mega-merger deal to combine their linear networks, digital assets, production operations, and program libraries.

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