Are aviation stocks flying high?

Excerpts from Bazaar on CNBC-TV18 Watch the full show » RELATED NEWS Mkts to rally on back of corporate news, good global cues Airfare hike to lead to cartelisation within industry Low-cost airlines capture 27.1 pc share in Jan-Sept Market set for 5-6 week rally: PN Vijay Kingfisher's Hubli-Bangalore flight soon ALSO READ See what other experts are saying about markets See what FIIs are saying about the markets See what Udayan Mukherjee is saying about the markets Kingfisher Air BSE | NSE 10/02/12 Are Mutual Funds betting on Kingfisher Air? Other Stocks in this news Jet Airways |

News wires suggest that airline companies are coming together to hike fares. Reports hint that analysts fear this could lead to cartelisation within the industry. Amidst such a background, one wonders what the prospects for the aviation stocks are. Investment Advisor PN Vijay and technical analyst Deepak Mohoni throw some light on the situation.

 

While PN Vijay finds this new development interesting, he says that it could just be a straw in the wind. "For the last one year or so, these people have been going for volumes and brought the prices down, but that is not working. The market has given a thumbs down to this sector."

 

Now, with aviation fuel prices dropping and these companies getting a bit of their pricing power back, Vijay feels that the situation should improve.

 

At the same time, he prefers to be cautious. He says, "We need at least one quarter of positive performance before one gets into them."

 

"Among all the stocks, Deccan Aviation seems interesting because it is going about things the right way," he informs.

 

Agreeing with this ideology, Deepak Mohoni says that Deccan has had the best momentum of the lot. "If one has to go for one of the aviation stocks, I would go for Deccan."

 

He says that Deccan seems to be starting to move a bit down from its highs. "If it dips to about Rs 106-107, and starts going up again in about an hours time, it might be a good play."

 

On the contrary, Mohoni is not very optimistic about Jet Airways or Spice Jet. "I would not really go for those stocks at all." 

 

By Crystal Barretto