Technical Check: 89% returns in a year! Lemon Tree Hotels stock could surpass Rs 100 in next 6 months; Is it time to buy?

Despite an 89 per cent gains already during the last year, Lemon Tree Hotels Ltd still has an upside left. The stock outperformend the Nifty50 by 71 per cent during this period and witnessed 18 per cent gains. 

Investors can continue to hold the stock while fresh money can be deployed now or on dips as technical indicators suggest an upside towards Rs 100 that translates into an upside of over 60 per cent from Rs 68.35 recorded on March 29, suggest experts.

See Zee Business Live TV Streaming Below:

The hotel company with a market capitalization of nearly Rs 5500 cr hit a 52-week high of Rs 71.25 on 30 March on the BSE. The stock has been on buyers’ radar despite muted trend seen in overall markets amid volatility caused by Russia-Ukraine war.

Lemon Tree rose over 28 per cent in a week and over 38 per cent in a month. On a 3-month basis, the stock has rallied over 50 per cent, data from Trendlyne showed.

After touching an intraday low of 45.30 on 24 February – the stock recouped much of the losses and rallied over 50 per cent since then to touch a 52-week high of Rs 71.25.

Although the consensus recommendation from 11 analysts for Lemon Tree Hotels Ltd. is buy, according to Trendlyne data. It is a high beta stock and investors are advised to stay cautious.

In terms of shareholding, promoters' holding remains unchanged, but promoter pledge increased in the December quarter. Total pledge now stands at 29.39 per cent, data from Trendlyne showed.

FIIs holding increased in the December quarter while mutual funds decreased holding in the same period.

The stock is trading well above the crucial short and long-term moving averages of 30,50,100 and 200-DMA which is a positive signs for the bulls.

In the past, the stock price started its downtrend from 91(April 2019) to 16.15(May 2020). The stock traded below averages after making a lower top at 65.5(Jan 2020),& breaching an intermediate low of 48(Aug2018).

“Value buying followed, and the stock made a high of 49.45 (Dec 2020) accompanied by higher bottoms formations. Since April 2021 the stock attracted volumes in its up move till 60(Nov 21),” Bharat Gala, President - Technical Research, Ventura Securities Ltd, said.

“Recently, the stock has given a breakout above trend line connecting April 2019 & March 2022. The MACD, ADX & DEMAND INDEX Indicators suggest a firm uptrend,” he said.

Gala further added that the possible targets are 85-110. If the stock price corrects downwards the buy levels are (57-54)-51--(49-47). A stop loss to be observed in the trade is 44, he explains.  

(Disclaimer: The views/suggestions/advices expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)