Everytime company comes out with stunning numbers, the market asks a simple question: Is this for real and Is this sustainable?
Jet Airways' posted a net profit of Rs 467.9 crore for October-December quarter. That number was at 63.11 crore last year same quarter. That's a HUUUGE jump...all because of the dramatic decline in crude prices.
Is this news surprise for the market? No.
The market always runs ahead of the news and it was expected that Jet Airways would be big beneficiary of decline in crude prices. Here's Jet Airways chart -
The stock rallied from 250 in June 2015 to 790 by Jan 2016. It then succumbed to Global volatility and gave up 50% of the move by selling off to 100 dma. It rallied big time on Friday and with the earnings coming in - there seems to be floor building up for the stock.
If crude has entered a structural bear market - then it's going to be full blown Bull market for the stock like Jet Airways. We might just be witnessing the start of Golden time for Airlines. This is one stock that is now BUY on dips stock and the best way to play the structural bear market in Crude. As always in market, there is nothing like certainty and every investment idea should have an exit strategy.
Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers