Indigo, SpiceJet: After a dismal 2022, will aviation stocks soar in 2023?

Indigo and SpiceJet shares must surpass these key hurdles to embark on a new trend.

In a precautionary move, amid rising cases of Covid-19 in China, neighbouring Asian countries and also few cities in the US and Europe, the government has imposed travel restrictions for air travellers from December 24. International passengers from 5 nations are subject to the random testing at the airport,  and travellers fear the list may soon include more countries. READ MORE

In the latter half of the 2022, the government had relaxed travel guidelines, post which, the holiday season has so far witnessed a strong travel demand, with airports getting overcrowded, reports suggest. 

Meanwhile, performance of airline stocks has not been exciting this calendar year. SpiceJet has plunged 46 per cent, while Indigo has declined 4 per cent in 2022, data shows.

Given the current threat of further restrictions, Here’s a technical outlook on airline stocks:-

InterGlobe Aviation Ltd (INDIGO)

Outlook: 14% upside once stock breaks out above Rs 2,100

The medium-term outlook for Indigo shares continues to remain favourable as long as the cushion of Rs 1,614, which is its 200-weekly moving average (DMA) is held.  On the upside, the stock will breakout once the hurdle of Rs 2,100-mark is surpassed, with aggressive volumes. The breakout could then lead a rally to a new all-time high of Rs 2,400 level. Immediate support for the stock comes at Rs 1,850 level, which was the breakout mark in this November.  CLICK HERE FOR THE CHART

SpiceJet Limited (SPICEJET LTD)

Outlook: Hurdle at Rs 45

Shares of SpiceJet broke out over Rs 60 level in last November, signalling a positive reversal for a medium-term perspective. However, the stock witnessed extensive profit booking soon after crossing Rs 100 mark, which later led to an aggravated sell-off. This selling pressure failed to hold the breakout mark of Rs 60, which served as a support and bears quickly gained control of the stock. The trend has now lost the upward bias, and as long as the hurdle of Rs 45 is not crossed, the weakness may persist. CLICK HERE FOR THE CHART