IndiGo shares zoomed 10% today; how strong is this upside?

Shares of InterGlobe Aviation Ltd (IndiGo's parent) witnessed a strong buying interest on Monday as the Indo-Pak ceasefire announcement resulted in the opening of Indian airspace for commercial operations. The Notices to Airmen (NOTAM) related to the closure of 32 airports across the country have now been cancelled. The development is expected to ease air traffic congestion and benefit both domestic as well as international airlines.

The full-service carrier's stock soared 9.78 per cent to hit a high of Rs 5,599. It was last seen up 7.45 per cent at Rs 5,479.85. At this price, the scrip has climbed 19.35 per cent on a year-to-date (YTD) basis.

Market experts expect the Rs 5,350-5,300 range to act as a strong support zone for IndiGo. And, a decisive move above Rs 5,600-5,650 levels is required for more upside potential.

Kunal Kamble, Senior Technical Research Analyst at Bonanza, said, "As long as the stock holds above the crucial support level of Rs 5,350, it is expected to move towards the immediate target of Rs 5,926, followed by Rs 6,210 in the short to medium term."

Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi, said, "Support will be at Rs 5,300 and resistance at Rs 5,600. A decisive move above Rs 5,600 level may trigger a further upside towards Rs 5,800. The expected trading range will be between Rs 5,200 and Rs 5,800 for the short term."

Ravi Singh, SVP - Retail Research at Religare Broking, sees Rs 5,650 as a strong resistance level for the stock. On the lower end, he mentioned that immediate support will be at Rs 5,500.

On the technical play, IndiGo's scrip traded higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-day and 200-day simple moving averages (SMAs). Its 14-day relative strength index (RSI) came at 58.91. A level below 30 is defined as oversold while a value above 70 is considered overbought.

As per BSE, the stock has a price-to-equity (P/E) ratio of 34.86 against a price-to-book (P/B) value of 56.65. Earnings per share (EPS) stood at 157.18 with a return on equity (RoE) of 162.65. According to Trendlyne data, IndiGo has a one-year beta of 0.9, indicating low volatility.