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Nigel D’Souza on why there is bounce in Sun TV Network shares

Updated : December 15, 2020 11:27:26 IST

A rank underperformer, Sun TV Network barely trades at even half of what it used to be in January 2018 when its price was over Rs 1,050 apiece. Since the lows of August 2020, the stock has been trading around Rs 400 mark. In fact, it has spent a lot of time in the Rs 400-420 price range and from there it has seen a bit of a bounce.

In an interview to CNBC-TV18, the management sounded confident both in terms of revival in advertisement revenue, Q3 will be much better than Q2.

The stock ended higher on Monday and two points stand out. First, the delivery data is more or less in line with what we have seen on average in the last one month or so but the volumes were up big time. The NSE’s volumes itself on Monday were much higher than what we normally see and that was backed by a big surge that we have seen in terms of open interest build-up and from the start of the series the open interest on Sun TV has doubled suggesting that a big built-up is seen there, more than 1 crore shares at the start of the series was around 55 lakh call.

So, there is a big move in the stock, big volumes and big open interest build-up suggesting that there is a bullish sentiment on the stock but that is only if it can hold on to its 50-day moving average. So the 50-DMA comes in at around Rs 467 mark; Rs 460-470 should be an important level on the downside. If it can hold that level going by the data points -- maybe it’s good for more.

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