SpiceJet, IndiGo: Aviation stocks look set for a further rally, charts show

A massive surge of over 35 per cent in the past three sessions indicates a positive momentum going-forward for SpiceJet

Investors have turned to the beaten-down aviation stocks ever since Pfizer and then Moderna Inc said their Covid-19 vaccine candidates have shown over 90 per cent efficacy. Shares of SpiceJet and IndiGo have outperformed the markets this month as investors were seen rotating out of 2020 winners such as IT and pharma and buying into sectors that were badly bruised because of the Covid-19 pandemic.

For instance, InterGlobe Aviation and SpiceJet have gained up to 26 per cent in November. In comparison, the benchmark Sensex has gained 11 per cent. In Thursday's intra-day session, stock of SpiceJet extended its rally into the fourth straight day and hit a high of Rs 77 on the BSE. READ MORE

So is more steam left in these counters? Here's what technical charts suggest:  

InterGlobe Aviation Ltd (INDIGO):  A break-out from the consolidation range of Rs 1,650 to Rs 1,590, on a closing basis, indicates positive sentiment in the stock. If the stock holds above Rs 1,700 level, the march could take the stock price to Rs 1,800 levels. The immediate support is seen at Rs 1,650 levels, followed by Rs 1,600. Since August 2020, the stock has resisted any downtrend despite being in the overbought zone as per relative strength index (RSI). CLICK HERE FOR THE CHART

SpiceJet Ltd (SPICEJET): A massive surge of over 35 per cent in the past three sessions indicates a positive momentum going-forward. The volumes have jumped two-fold over the "average volume" pointing at a strong interest from investors. While, a jump from Rs 55 to the current price of Rs 75 in such a short span may lead to some profit-booking in the short-term, the corrected price may find support at Rs 65 and Rs 60 levels. That said, the medium-term outlook shows the trend is moving in the direction of Rs 100 levels. CLICK HERE FOR THE CHART