Is the tide turning for media stocks? Dish TV, PVR Inox can rally up to 26%

The Nifty Media index has shed 15 per cent so far in 2024 and is the sole index trading below the 200-DMA on the NSE. Chart suggests better days are likely ahead.

The NSE Nifty Media index has been the major laggard on the bourses so far in 2024. The index has declined 15.2 per cent as of July 24, while the benchmark Nifty 50 index has rallied 12.3 per cent in the same.

One of the key reasons for the underperformance has been a 50 per cent fall in the index heavyweight - Zee Entertainment.

That apart, shares of TV18 Broadcast, Dish TV and PVR Inox have plunged over 10 per cent each so far this calendar year.

On the other hand, Tips Industries has rallied over 77 per cent, and Saregama has surged 46 per cent. Sun TV Network and Hathway Cable were the other significant gainers.

 

Amid this underperformance, the Nifty Media index has been the only sectoral index to quote below its long-term moving average (200-DMA) on the daily charts.

However, in the last two trading sessions, the Nifty Media index has gained 3.6 per cent, while the Nifty 50 has declined 0.4 per cent amid the Union Budget related jitters. 

Crisil Ratings, in a media release today, said print media companies could see revenue growth of 8- 9 per cent in FY25 on the back of buoyant growth in advertising revenue, driven by strong localised demand from key advertising sectors, together with a loyal subscriber base.

"The healthy growth, coupled with softening newsprint prices, will also expand the operating profitability of the players by ~200 basis points (bps) to 20 - 22 per cent. This will be in addition to the ~400 bps expansion in margin already clocked last fiscal as newsprint prices retracted.", the release added.

Given this background - Is the tide turning favourable for the Nifty Media and media-related stocks hereon or is this just a short-term pullback? 

Here's what the charts suggest:

Nifty Media

Current Level: 2,028

Upside Potential: 18.3

Support: 1,930

Resistance: 2,110; 2,140

Post the breakout above its 100-DMA (Daily Moving Average) on June 10, the Nifty Media index has managed to sustain above it on a consistent basis. However, the index despite multiple attempts has failed to overcome the hurdle at 20-DMA.

The daily chart suggests that the index seems trapped between these two key moving averages, suggesting a trading range of 1,930 - 2,110 in the near-term. A breakout on either side could open the next leg of the trend. CLICK HERE FOR THE CHART

Having said that, the key momentum oscillators on the weekly chart are clearly positive. Hence, the index may attempt a positive breakout going ahead. For a meaningful rally to emerge, the Nifty Media index will need to counter overhead resistance at the 200-DMA and at 2,140 levels; above which the index can potentially rally to 2,400 levels. 

Zee Entertainment

Current Price: Rs 137.40

Upside Potential: 19%

Support: Rs 130; Rs 125

Resistance: Rs 149; Rs 154; Rs 163

Zee Entertainment stock continues to trade on a tepid note as the stock trades below all the 4 key moving averages on the daily scale. The stock at present seems to be attempting to form a support base around Rs 130 levels, with key support seen at Rs 125.

On its way up, the stock will need to conquer and sustain above the key hurdle at Rs 149, in order to revive the sentiment at the counter. Even as the overall bias seems negative at the counter, a pullback towards Rs 154 - Rs 163 levels cannot be ruled out. CLICK HERE FOR THE CHART

PVR Inox

Current Price: Rs 1,480

Upside Potential: 26.4%

Support: Rs 1,455; Rs 1,400; Rs 1,380

Resistance: Rs 1,492; Rs 1,540; Rs 1,575

PVR Inox stock is seen attempting to break above its 200-DMA, which stands at Rs 1,492 for the sixth time in the month of July. Above which, the stock has near resistance at Rs 1,540 and Rs 1,575 levels.

Break and sustained trade above Rs 1,575, can strengthen the PVR Inox stocks and propel it towards September 2023 highs around Rs 1,870 levels. CLICK HERE FOR THE CHART

On the downside, the 20-DMA at Rs 1,455 is likely to act as an immediate support, below which support can be expected around Rs 1,400 and Rs 1,380 levels.

Sun TV

Current Price: Rs 805

Upside Potential: 15.5%

Support: Rs 790; Rs 750

Resistance: Rs 825

Sun TV has been making higher highs and higher lows on the daily scale for the last two months. The stock has consistently found support around its 20-DMA, and met with resistance at the higher-end of the anticipated trading band.

At present, support is visible at Rs 790 and resistance at Rs 825; break and sustained trade above the same can trigger a rally towards Rs 930 levels in the ensuing period. The overall bias is likely to remain positive as long as the stock holds above Rs 750. CLICK HERE FOR THE CHART

Dish TV

Current Price: Rs 16.10

Upside Potential: 13%

Support: Rs 15.60; Rs 15.30

Resistance: Rs 16.90

On Wednesday, Dish TV gave a breakout above its short-term moving averages. Today, the stock is seen sustaining above the 20- and 50-DMA on the daily chart. The stock now seems headed towards the 100-DMA at Rs 16.90; above which a rally towards the 200-DMA at Rs 18.20 seems likely.

Key momentum oscillators on the daily and weekly chart are in favour of an upside. Support for the stock is expected around Rs 15.60 and Rs 15.30. CLICK HERE FOR THE CHART

Saregama

Current Price: Rs 543

Upside Potential: 13.3%

Support: Rs 540; Rs 520

Resistance: Rs 560

Saregama stock is attempting to clear the resistance at its 20-DMA at Rs 540. Key momentum oscillators are favourable placed on the daily chart. Hence, the stock may see further upside - up to Rs 560 in the near-term; above which a rally to Rs 615 seems likely.

In case, the stock fails to hold above the 20-DMA, the stock may seek support around its 50-DMA at Rs 520 levels. CLICK HERE FOR THE CHART