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JetAirways: Complex Correction

Jet Airways, one of India's leading and biggest domestic airline companies, providing it services domestically as well as internationally, had came out with an Initial Public Offerings through book-building process way back in February, 2005. The ipo was subscribed by 16.2 times as compared to 17.27 millions shares that were offered for subscription. The ipo price was fixed at 1100 whereby the price range for the ipo was 950-1125.

The stock of Jet Airways got listed and started trading on BSE & NSE, India's leading stock exchanges, on and from 14th March, 2005. The stock opened at the price of 1155 being the low for the rest of the day, went to the high of 1338.90 and got settled/closed at the price of 1304.20 per share on NSE on the listing date. The stock made its all-time high of 1382.75 on 26th April, 2005 and still the same has not been breached after that. Moreover, the stock breached its issue price of 1100 on 21st September, 2005 and traded in the range of 970-1125 over the next 5-6 months. On 23rd January, 2006, the stock price of Jet Airways went down its issue price for not looking back it again and made an all time low of 115.20 on 12th March, 2009. More than eleven years have passed by, after the breach of the level of 1100, and stock is still trying it hard to find the way back to and above its issue price.

There are many reasons, on micro and macro level, behind the stock showing poor performance. Accute competition, under developed and niche market, price war among the players, high ATF (air turbine fuel) prices due to high crude oil prices and government control, etc., are some of the reasons behind the poor earning performance resulting in lower stock prices.

Below shared is the weekly chart of Jet Airways showing movement from and after November, 2006. The stock of Jet Airways, after making its all-time low price of 115.20 on 12th March, 2009, began to rise and made a high of 925.65 on 10th November, 2010. After that, the stock saw southward movement once again, though the all-time low price of 115.20 still remains intact and protected, and has been trading in the range of 166-926 since November, 2010.

As it has been shown in the chart above, the movement from the low of 115.20 to the high of 925.65 in the stock of Jet Airways, at first look, looks like an impulsive run. The stock of Jet Airways, after witnessing high of 925.65, has seen multiple new 52 week highs and lows, though keeping the low price of 115.20 and high price of 925.65 intact from breaching. The movement in the stock of Jet Airways, as shown in the chart, seems to be more of complex correction in nature than any other sort of corrective pattern.

The stock is probably forming a Triple-zigzag complex corrective pattern (WXYXZ), and the same may get completed anytime soon with the completion of the wave 'Z', as the first four legs of this complex corrective pattern, i.e., W, X, Y & X, had already been completed. The point or the price for the completion of the wave 'Z' comes around 250.

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