Indigo and other Aviation industry share prices are falling sharply from last few days. Market sentiment radically shifted from Positive to Negative. Investors and Market participants are liquidating their positions in an Aggressive way. Indigo Share prices tumbled from 1500 to 1200 within 4 trading days; it’s almost 30% decline from its earlier high. This scenario is clearly visible on the Daily chart.
Indigo Shares – Price Action Analysis on Daily chart
From the beginning of Jan till April, Market structure and Price behavior was an Upside directional Range. Some traders might interpret this as a trend, but logically this is nothing more than a range bound market with a direction. By closely observing the structure, we can see both buying and selling pressure. Price swings are almost symmetric in size. Bulls and Bears are engaged in constant battle to find control over Market sentiment.
In the Mid of April, Price action created a false pullback type of formation at 1450 – 1500 and trapped weak hand traders. Later when share prices started to fall sharply at the end of April, these weak hand players were forced to liquidate their positions.
Higher valuation and poor quarterly results are the pre dominant factors which caused aggressive selloff in Indigo share prices. It seems like big players were already expecting and pricing in weak quarterly numbers even before the public announcement of results. By looking at the size of the candles, we can clearly conclude that large order flow has taken place.
Right now it’s pretty clear that Market tone is pessimistic. The selloff is very aggressive; are there any chances for retracements or bounce back in share prices? Or would it tumble even further? Traders should watch the Price action for Answer and trade according to resulting market Behavior.
