Zee Spikes On Short Covering, SEBI Analyst Notes Potential Breakout On Close Above This Level

A decisive close above ₹130 could open the path to ₹140–145 in the short term, according to the analyst.

Zee Entertainment shares rallied over 5% on Friday, driven by sharp volumes (nearly 3 times its 20-day average). 

SEBI-registered analyst Varunkumar Patel noted that there was no fresh corporate announcement or regulatory filing driving this rally, suggesting that Friday’s upmove was primarily technically driven with traders betting on a potential breakout. 

Why Is Zee Rallying Today?

Patel flagged that its recent correction had taken the stock close to multi-month support levels, where buying interest usually emerges. And short covering seems to be adding fuel, as the derivatives data indicate a reduction in short open interest (OI). 

Broader market sentiment has improved, which is also pulling Zee higher. 

Technical View 

Patel identified support at ₹115–₹117, which acted as a strong base for multiple weeks. Resistance is seen at ₹126–₹130, a heavy supply zone. The stock needs a decisive close above this level, he added.

Other indicators, such as the Relative Strength Index (RSI) at 52, are showing bullish momentum, but it still has room before hitting overbought.

Zee Entertainment’s 200-day Exponential Moving Average (EMA) stands at around ₹123, and once the stock closes above it, it may trigger a breakout. If Zee stock sustains above ₹130 with volume, it can quickly move to the ₹140–145 zone in the short term. On the downside, failure to hold ₹115 may drag it back to ₹108, according to Patel.

What Should Investors Do?

Fundamentally, Zee is still struggling due to the delay in the Sony merger, a weak advertising environment, and an uncertain earnings outlook. However, traders are active on the stock whenever it reaches oversold zones, he noted—adding that Friday’s move looks like one such technical rebound. 

Patel believes that while Zee’s momentum is strong, follow-up buying above ₹126–130 will be key. He advised short-term traders to watch these levels closely, while long-term investors should still wait for clarity on merger progress and business revival.

What Is The Retail Mood?

Data on Stocktwits shows that retail sentiment has remained ‘neutral’ for over a month. 

Zee shares have risen a little over 1% for the year so far. 

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