InterGlobe Aviation, part of the airline industry, has fallen by over 14 per cent from the November 2021 high but a breakout from a double bottom pattern on the weekly charts with strong volumes suggests that bulls are here to stay.

Short-term traders can look to buy the stock now or on dips for a possible target of Rs 2,380 in the next 1-2 months which will surpass its current 52-week high of Rs 2,379 recorded back in November 2021, suggest experts.

The airline stock hit a 52-week high of Rs 2,379 on 16 November 2021, but it failed to hold on to the momentum.

Chart Check

It made two identical lows above Rs 1,500 levels on the weekly charts once in March and the other in June 2022 before recording a breakout above the neckline placed around Rs 1,900 levels in August 2022.

A double bottom pattern is usually formed at the bottom and indicates the end of a falling market. The pattern is formed by two clear bottoms separated by a top. The confirmation occurs when the price goes above the resistance line.
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The stock is holding well above the 50-weeks moving average and also trades above the 200-weeks moving average which auger well for the bulls. The trend could well take the stock to fresh 52-week highs in the next 3-4 weeks.

The stock has risen over 2 per cent in a week and nearly 4 per cent in a month. The Relative Strength Index (RSI) is at 61.1, RSI below 30 is considered oversold and above 70 is considered overbought, Trendlyne data showed.

On the weekly timeframe of

, we can observe that after an uptrend in prices, it made a base around the crucial support of Rs 1,573.75 which is a multiple touch point level as well as 50 per cent Fibonacci retracement level of the advance from Rs 771 (March 2022) till Rs 2,380 (November 2021).

“Prices in the first week of August gave a breakout from the double bottom pattern, which indicated the beginning of trend on the upside. While in the latest week prices have closed above the high of Doji candlestick pattern, which was formed in the prior week,” Vidnyan Sawant, AVP – Technical Research, GEPL Capital, said.

“The breakout of the Double bottom pattern was confirmed by high volumes. On the daily timeframe the prices are hovering around the upper Bollinger band which indicates that the volatility in the prices are rising for upside,” he added.

RSI plotted on the daily as well as on weekly timeframe are rising and have sustained above 50 mark which reflect the rising momentum with the trend in the prices.

“Going ahead, we expect the prices to go higher further till the level of Rs 2,380 in next 1-2 months, where the stop loss must be placed at the level of Rs 1,925 on the closing basis,” recommends Sawant.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)


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