Trading strategies for Aviation stocks amid Go First bankruptcy

Indigo shares may hit a new historic peak once it settles over Rs 2,200 level.

Shares of Aviation sector were catching limelight on Wednesday, following the unlisted airline owned by Wadia group Go First filed for bankruptcy.

InterGlobe Aviation’s shares hit a new 52-week high, a gap up opening supported by strong volumes, while SpiceJet’s shares were seen trading over 4 per cent, crossing above average volumes of last several months. 

Meanwhile, Jet Airways (India) locked in 5 per upper circuit, showing a rebound from its 52-week low.

Here’s the technical outlook for aviation stocks amid Go First filing for bankruptcy:  

InterGlobe Aviation Ltd (INDIGO) 

Outlook: Sustainability over Rs 2,200 may see stock reaching a new historic peak

Following a new 52-week high, the stock has revealed its intent to rally further. Once the price action succeeds in sustaining over Rs 2,200 mark, the bullish bias could see a rally to a new all-time high of Rs 2,400 levels. 

Going forward, Rs 2,100 and Rs 2,050 could operate as the support mark, assisting the stock in bolstering the upward bias.

The weekly chart suggests a medium-term support of Rs 1,900-mark, its rising support trend line. The chart also reveals a rising channel formation. CLICK HERE FOR THE CHART

SpiceJet Ltd (SPICEJET)

Outlook: Needs to surpass the 200-DMA

The broader outlook for the shares of SpiceJet is bearish, as the formation of “Lower High, Lower Low “continues to dominate the price action. The counter must cross the significant daily moving average (DMA) of 200-days to recoup the positive sentiment. 

The 200-DMA is placed at Rs 38.60 level, as per the daily chart. The immediate support for the current positive bias comes to Rs 29, which needs to be considered on the closing basis.

A breakout over the 200-DMA shall see the price action heading in the direction of Rs 45 and Rs 50 level. CLICK HERE FOR THE CHART

Jet Airways (India) Ltd (JETAIRWAYS)

Outlook: positive above 200-DMA
 

Shares of Jet Airways locked in 5 per cent upper circuit on Wednesday. Nevertheless, the overall trend continues to endure a negative bias. The stock is trading in a downtrend, with a “Death Cross”, as per the daily chart.

To revive the bullish bias, the stock needs to leap over the 200-DMA set at Rs 82-mark. Until that happens, as any reversal could be viewed as exiting positions. CLICK HERE FOR THE CHART