We recommend a buy in SpiceJet at current market price. From the weekly chart of SpiceJet, we note that it has been on a broad sideways consolidation between Rs 50 and Rs 65 since early June 2007.
On December 17, the stock broke out of this sideways consolidation and jumped up by 16 per cent, accompanied with heavy volume.
Breakout of the long-term resistance level of Rs 65 indicates beginning of a new uptrend. Moreover, the stock is trading well above the 21- and 50-day moving average line. The volume has been increasing in the past five trading sessions. The daily as well as weekly momentum indicators are featuring in the bullish region. The moving average convergence divergence is steadily rising in the positive region indicating bullish momentum.
The immediate support for the stock is pegged at Rs 55 and the next support is at Rs 50.
Short-term investors with high risk profile can buy the stock while maintaining the stop-loss at Rs 61. We expect the stock to move up to the immediate resistance level at Rs 80 in the short-term.
Via Businessline
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