Lemon Tree Hotels Expansion Drive Sparks Bullish Momentum; SEBI Analyst Sees Over 20% Upside

Lemon Tree shares gained 2% intraday on Wednesday after the company signed two new properties in Uttar Pradesh and Madhya Pradesh (Keys Prima by Lemon Tree Hotels in Varanasi & Keys Select by Lemon Tree Hotels in Rewa). It has also expanded its footprint in Andhra Pradesh.

According to a regulatory filing, The Keys Prima by Lemon Tree Hotels, Varanasi, will be franchised under Lemon Tree Hotels and will feature 153 well-appointed rooms, it added. Meanwhile, Carnation Hotels, a wholly owned subsidiary of the company, will manage its Keys Select by Lemon Tree Hotels, Rewa property, which will feature 50 rooms, two restaurants, a banquet hall, a swimming pool, and other public areas.

On September 23, Lemon Tree also launched its fifth hotel in Andhra Pradesh, Keys Lite by Lemon Tree Hotels, Krishna, Vijayawada.

Earlier this month the hospitality company had signed one property in Bihar and three in Rajasthan. 

SEBI-registered analyst Ashok Kumar Aggarwal of Equity Charcha highlighted that Lemon Tree Hotels is the largest mid-priced and the third largest overall hotel chain in India. 

Trading Strategy

On the technical front, he noted that its Relative Strength Index (RSI) is above 60, and the Chande Momentum Oscillator (CMO) is over +20, indicating strong positive momentum. Additionally, an increase in On Balance Volume (OBV) on both weekly and monthly time frame charts showed strength, suggesting bullish sentiment.

For a medium-term trade, Aggarwal recommended buying at ₹167-₹170, with stop loss at ₹150 for target prices of ₹210-₹215.

What Is The Retail Mood?

Data on Stocktwits shows retail sentiment has been ‘bullish’ for a month. 

Lemon Tree shares have risen 12% year-to-date (YTD).

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