Indigo’s troubles on the catwalk now extend to the charts. Should you buy, sell or hold?

The recent flight disruptions at InterGlobe Aviation may have diverted attention from long-term stock underperformance, but investor sentiment remains negative. A fresh decline of 9% in the last five sessions has further deepened the decline in Indigo shares. Technical indicators place the stock firmly in weak territory, prompting one analyst to issue a “Sell” call and two others to advise investors to stay away for now.Despite positive broader market sentiment, IndiGo shares are down over 4% in the past three months, while the Nifty and Sensex have risen over 5% in the same period. The underperformance comes ahead of the airline’s entry into the Sensex on December 22, shortly after joining the Nifty benchmark earlier this year.

Indigo Stocks: What Charts Suggest

Sudeep Shah, vice president and head of technical and derivatives research desk at SBI Securities, suggested that investors with a short-term view should avoid the stock. Indigo has faced strong resistance in the Rs 5,950-5,960 zone and has retreated sharply from those levels, falling below 20, 50 and 100 DEMA, underscoring the weakening near-term momentum, he said. The RSI dipping below 40 further reflects mounting bearish pressure, he added.

“On the ADX, the DI crossing above DI+ indicates growing selling strength, while the MACD dipping below both the signal line and the zero line confirms a shift towards a bearish trend. The Rs 5,530-5,500 zone remains a key support area and a decisive close below it could pave the way for a decline towards Rs 5,460-5,450, near the 200-day EMA. Conversely, 5,700 now follows the immediate resistance level,” Shah said.

Echoing a similar sentiment, expert Nilesh Jain also suggested an ‘Avoid’ for investors. The Head Vice President, Equity Research Technical and Derivatives at Centrum Broking sees strong support at Rs 5,400. A break below this level will drag the stock further towards Rs 5,250, he warned, placing the resistance at Rs 5,700.

Analyst Anuj Gupta, director of Ya Wealth Global Research, has a more bearish view on the counter. He has suggested a ‘Sell’. “InterGlobe Aviation is trading below a six-month low. It has corrected 7% this month. The stock is forming a lower top and lower bottom formation, indicating weaker trends on the technical charts,” said Gupta. He sees further downside for InterGlobe stock and places strong support at Rs 5,300 and resistance at Rs 5,800 levels.

Business clarification on disruptions

The company released a statement late on Wednesday, acknowledging the significant disruptions in IndiGo’s operations on the network over the past two days and issuing a public apology.“A large number of unforeseen operational challenges, including minor technology issues, schedule changes related to the winter season, adverse weather conditions, increased congestion in the aviation system and the implementation of updated flight duty time limitation rules negatively impacted our operations in a manner that was not feasible to expect,” a company statement said.

The company further said that to contain the disruption and restore stability, it has initiated calibrated adjustments to its schedules.

“These measures will remain in place for the next 48 hours and will allow us to normalize our operations and gradually restore our punctuality across the network. Our teams are working around the clock to reduce customer inconvenience and ensure operations stabilize as quickly as possible,” the filing said.

The major airline suffered a loss of Rs 2,582 crore in the September quarter, against a profit of Rs 2,176 crore in the previous June quarter. However, compared to the same period last year, the airline’s loss widened to Rs 987 crore. However, operating revenues rose 9% year-on-year (year-on-year) to Rs 18,555 crore.

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