INDIGO - Technical Analysis with Chart Patterns & Indicators

Last Updated Time : 20 Dec 25, 03:54 pm

Technical Rating: 3.4

📊 Chart Patterns: INDIGO is trading below its 50 DMA (5,500 ₹) and 200 DMA (5,408 ₹), showing weakness. Price action suggests a corrective phase with support near 5,000 ₹ and resistance around 5,400–5,500 ₹.

📈 Moving Averages: Current price (5,149 ₹) is below both 50 DMA and 200 DMA, confirming short-term and medium-term bearish sentiment.

📉 RSI: At 39.2, RSI is in the weak zone, leaning towards oversold territory but not yet signaling reversal.

📉 MACD: Strongly negative (-217) indicates bearish crossover, confirming downside momentum.

📊 Bollinger Bands: Price is near the lower band, suggesting oversold conditions and potential for short-term bounce.

📊 Volume Trends: Current volume (43.9 lakh) is higher than 1-week average (32.2 lakh), showing strong selling pressure and volatility.

📌 Momentum Signals: Weak short-term momentum; rebound possible if price sustains above 5,000 ₹.

🎯 Entry Zone: 5,000–5,100 ₹ (near support).

🎯 Exit Zone: 5,350–5,450 ₹ (near resistance trendline).

🔎 Trend Status: Reversing from oversold levels but still in bearish territory.

Positive

• EPS of 131 ₹ supports long-term valuation strength.
• ROE of 104% highlights strong return on equity.
• FII holdings increased (+1.13%) and DII holdings increased (+0.56%), showing institutional support.
• PEG ratio of 0.92 indicates reasonable valuation relative to growth.

Limitation

• Stock trading below both 50 DMA and 200 DMA, showing technical weakness.
• High debt-to-equity ratio (8.83) raises financial risk concerns.
• Dividend yield is low (0.20%), reducing income appeal.
• Quarterly profit variation (-164%) shows earnings volatility.

Company Negative News

• Quarterly PAT turned negative (₹-2,614 Cr vs ₹2,161 Cr), showing sharp earnings deterioration.
• Weak technical indicators (RSI, MACD) point to short-term bearishness.

Company Positive News

• Institutional support with FII and DII inflows.
• Strong ROE (104%) reflects efficient capital utilization.
• PEG ratio suggests valuation is not excessively stretched relative to growth.

Industry

• Industry PE at 18.6 is much lower than INDIGO’s P/E (39.2), suggesting overvaluation compared to peers.
• Aviation sector outlook remains cyclical, influenced by fuel costs and demand recovery trends.

Conclusion

⚖️ INDIGO is oversold with RSI at 39.2 and MACD strongly negative, suggesting weak short-term momentum. Traders may consider entry around 5,000–5,100 ₹ with exit near 5,350–5,450 ₹. Long-term investors benefit from strong ROE and institutional support, though high leverage, earnings volatility, and overvaluation relative to industry remain concerns.