Lemon Tree Hotels: Charting a bright future with a 7.5% weekly rally and breakout pattern

Amidst recent market profit-taking and a downward movement, one prominent player in the hospitality sector is turning heads. Lemon Tree Hotels Ltd. is shining bright with a remarkable 6% rally this week, accompanied by robust trading activity. This surge has heralded the emergence of a breakthrough continuation price pattern on the weekly chart.

Lemon Tree Hotels Ltd. is a major player in the mid-priced and overall hotel chain landscape of India. The company operates across upscale and mid-priced sectors, offering a range of hotel experiences under its renowned brands such as Lemon Tree Premier, Lemon Tree Hotels, and Red Fox Hotels. Catering to families, couples, and business travellers, the company has carved a niche with its value-for-money propositions.

The recent price action tells a captivating story. After reaching a peak of Rs 99.90 in late May 2023, the stock experienced a pullback, finding support around the Rs 72.80 level—retracing over 38.2% from its impressive March 2023 rally. The tide has turned lately, as the stock witnessed an upward swing following a bullish crossover of the 5-26 and 13-26 Daily Moving Averages (DMA). The highlight is a breakout trendline connecting the highs of late May 2023 and early August 2023, forming a bullish up flag pattern spanning 12 weeks.

With the current week’s surge of over 7% and poised closure above the breakout trendline, Lemon Tree Hotels Ltd confirms its breakout potential, backed by substantial daily trading volumes exceeding 33 million shares. Investor enthusiasm is palpable as this breakout opens doors to a potential target of Rs 125, signalling a more than 25% gain from the breakout level of Rs 98. Swing traders and short-term investors are closely eyeing the unfolding performance, recognizing the tantalizing prospects that Lemon Tree Hotels Ltd offers for a promising upside.