Interglobe Aviation which operates IndiGo ,a low cost airline carrier informed the exchange that the company has suspended the operation of all its scheduled commercial international and domestic flights until May 3, 2020. Company also said that this is in compliance with the Circulars dated April 14, 2020 of the Directorate General of Civil Aviation. Prime minister Narendra Modi yesterday announced extension of the national lockdown until May 3, 2020 to curtail the spread of Deadly Coronavirus.
Domestic and international commercial flights in the country were also suspended till April 14 amid the first lockdown to curb spreading of coronavirus infections.
Interglobe aviation shares are consolidating in last few weeks after sharp fall in late Feb and early march. Companies monthly chart is showing formation of ascending triangle with resistance around 1066 and rising support levels.
In view of rising Coronavirus cases in India and shutdown of operation company’s earning are expected to take hit.In this scenario sharp rally in share looks highly unlikely.
We suggest to implement this bear strategy to profit
Short the future at current price of 1006.5 to earn profit from downside in share price. To mitigate the risk of rise in share price, one can sell 1000 Put @ 93.25. By selling put , we can pocket 29925 Rs.
One should keep the stop loss of 1066.
In a downward move, the stock is likely to find support around 850, the level from which it had bounced from last month.
Max profit at expiry: 29925 Rs if stock stay below 1000 Rs at expiry.
Max loss : Unlimited if position not covered above 1100 Rs.