The stock is Jet Airways.
Reason: Jet Airways is one of the biggest and direct beneficiary of low Crude oil prices and the party has just started. If Crude Oil remains in a structural bear market - Jet Airways stock has huge upside fundamentally. This is the wealth transfer happening from Crude producers to crude consumers. Just look at the last quarter earnings of Jet Airways:
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.
Let us look at the Chart
1. The Rally: Jet Airways rallied big time from 250 to 790 between June 2015 and Jan 2016. It was the market pricing in the low Crude prices benefit.
2. The Pullback: The market turbulence of last one month has resulted in sharp correction and Jet Airways stock has come off from 788 down to 520. That's a pullback of 50% of the rally it had in last 6-7 months.
3. Convergence of Supports:50% retracement of rally is considered a strong support as per Fibbonacci trading rules. That's not all - it also converges with 100 day moving average from which now Jet Airways has bounce twice making it a very strong support area.
Stop Loss: Below 486 If you are worried about the market turbulence.
No matter how you look at it - Jet Airways stock appears attractive. Please note - I am not an investment advisor. This is my personal biased opinion based on my world view. Please always do your own due diligence before making any investment.
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