An Aviation Stock to Power Your Trading Wings

  • Stock Market Analysis

About the company:

Established in August 2006, Interglobe Aviation Ltd (NS: INGL ) is commonly known as Indigo. It is India’s largest passenger airline operating as a low-cost carrier, serving 86 destinations including 24 international destinations. The company offers passengers a simple and unbundled product. From a single aircraft in 2006, Indigo has grown its fleet to 262 aircraft. The stock is trading at an 18.26% discount to its 52-week high level. The 52-week high and 52-week low range is Rs 2,380 – Rs 1,356.

Technical observations:

One week time frame: (Chart 1)

On a weekly time frame, Interglobe Aviation scrip broke out of Ascending Triangle pattern and made a 52-week high. From that level, it has pulled back to the support level of Rs 1,860 and has bounced back in the current week. You should also note that the share has ably taken support at the 50-day EMA line for the last year. We anticipate a further upward move supported by higher volumes. The relative Strength Index (or RSI) line has also taken support on the 50 levels and has bounced back. Long-term investors can enter at current levels. They should maintain the stop loss at Rs 1,815 on a weekly closing basis.
IAL1
One day time frame: (Chart 2)

On a daily time frame, we can see that Interglobe Aviation share has multiple times taken support at Rs 1,860 level and has bounced back. However, it is noteworthy that, during the recent consolidation, the share has broken below the 50-day EMA line. We anticipate an upward move aided by an increase in volumes. RSI line has taken support at a level of 60 and has bounced back and crossed 40 from below. We will, however, turn bullish only when the level of 50 is crossed. Positional traders should enter only when the scrip crosses the Rs 2,000 level and stays above it. They should maintain the stop loss at Rs 1,860 on a daily closing basis.
IAL2

Conclusion:

We expect the scrip to maintain positive bias and move higher going ahead from current levels. Short-term traders should take a position at the current level. They are reminded to keep a strict stop loss at Rs 1,897 on a daily closing basis.

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