The share price of Kingfisher Airlines has recorded a swift decline from its September 2008 high of Rs94 levels to a low of Rs22 in November 2008. This represents more than 76% value erosion in a span of just two months.
The stock has been trading in a broad range between Rs22-37 since November 2008.
This sideways consolidation appears to have taken form of an inverted head and shoulder on the daily charts. With the neckline been placed at Rs36 levels.
The Daily MACD is in continues buy mode where as the Daily RSI is also exhibiting positive divergence in line with the price pattern. The current move has been well supported by volumes, which has shown a smart increase in past few trading sessions.
The implication of the pattern suggests that following the breakout past the neckline placed at Rs36 levels the share price has the potential to head towards targets of Rs45-50 and/or Rs55 levels.
Keeping in mind the above mentioned technical evidences we recommend traders to BUY the stock at current levels and on declines to supports of Rs31-32 levels for targets of Rs45, Rs50 and/or Rs55 levels. A stop loss below Rs28 must be followed on all long positions.