Spice jet had been one of the best performer in aviation sector last year with almost 6x returns but the rally was not carried forward to new calendar year and we saw 50% profit booking to that rally in first three months itself. In recent weeks stock was resisting near to 100 day average which was around 68 but since last 3 days we have got close above the same giving us a short term confirmation for the upside. Most importantly while resisting near to 100 day average for 3 times prior gave birth to bullish reversal pattern “Inverted Head and Shoulder” as marked in the graph. Neckline of the pattern is at 67.20 which out to act as stop loss for our trade.

Even cyclically, this is the most promising quarter of each year for airlines. To support my view lets look at the Load factor graph below which says that Months from March-June have always seen passenger traffic growing and Airlines operating at optimum capacity

Load_factor_8th April

 

So Strategy on Stock is

Buy Positional with tgt of 80 and SL: 67.20

Risk:Reward= 1:2.4

Rd disclaimer on luvkushfinserve.com before trading!!

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