Three hotel stocks riding Santa’s wave: Is more cheer coming in 2025?

After a remarkable rally from 23,300 to 24,700, the Nifty50 has taken a breather, slipping below the 24,000 mark. This pullback, from 24,700 to 23,900, has left some bulls feeling disheartened. But before you let your holiday cheer fade, a hidden gem in the market may be ready to surprise you.

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While the Nifty’s chart currently shows a minor correction, there’s a silver lining for the bulls. The retracement has reached the 61.80% Fibonacci golden ratio at 23,872—a level historically known for halting bearish momentum and setting the stage for potential reversals. If the Nifty reclaims 24,089, it could mark the return of the bulls. Until then, however, let’s shift focus to a sector that’s poised to shine this holiday season: Hotels.

Amid choppiness in the broader market, the hotel sector appears set for a festive boost. Although the National Stock Exchange and BSE lack a dedicated hotel sector index, we’ve created the Definedge Equal Weighted Hotels Index, comprising 19 hotel stocks listed on the two exchanges.

On the Daily 0.25% X 3 Point and Figure (P&F) chart, this index recently broke out of a descending triangle pattern to the upside, signalling the resumption of its bullish trend.

Post-breakout, the index has already surpassed previous highs, reaching new all-time records and outperforming the broader market. With this breakout and its strong momentum, the hotel sector offers an exciting opportunity for readers seeking a little holiday cheer in their portfolios.

Stocks in focus: Three promising picks in the hotel sector

From our basket of 19 hotel stocks, we’ve identified three standout picks based on their technical indicators and potential for a strong uptrend.

1. Chalet Hotels: Volume speaks louder than words

Chalet Hotels, a leading player in the hospitality sector, has delivered an impressive breakout on its weekly chart.

After consolidating for nearly 38 weeks, the stock price has surged, signalling the resumption of a bullish trend. What stands out is the massive volume accompanying this breakout—the highest weekly volume since February 2022. Such significant volume often marks the start of a new bullish cycle, making Chalet Hotels a compelling stock to watch in the coming weeks.

2. Kamat Hotels: A broadening wedge with high volumes

Kamat Hotels, a prominent name in the hospitality industry, has also exhibited remarkable technical strength.

The stock recently broke out of a broadening wedge pattern on the weekly chart—a formation characterized by increasing price volatility, with higher highs and lower lows. This breakout, supported by the highest weekly volumes since February, suggests a potential trend reversal is underway.

With a solid technical setup and robust volume confirmation, Kamat Hotels is well-positioned for growth, making it a strong candidate for your watchlist.

3. EIH Hotels: A bullish reversal in the making

EIH Hotels, renowned for its luxury hospitality services, is showing signs of a bullish reversal on the weekly chart.

After a swift rally from ₹350 to ₹440, the stock faces resistance near its previous high of ₹442. For bulls to regain momentum, this resistance must be breached. On the RSI front, a bullish crossover indicates continued bullish control, though the stock is currently consolidating at a critical level.

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For further upside potential, traders should look for a decisive move above ₹445- ₹450, which would confirm the resumption of bullish momentum.

A Santa rally for hotels?

The holiday season is synonymous with celebration, and for market enthusiasts, the hotel sector might just be the perfect gift this Christmas. 

The Definedge Hotels Index has displayed strong momentum, breaking out to new highs. Stocks like Chalet Hotels, Kamat Hotels, and EIH Hotels are showing bullish technical patterns, offering plenty of reasons for optimism.

For more such analysis, read Profit Pulse.

While the Nifty50 tests the patience of bulls, the hotel sector appears ready to don its Santa hat and deliver some festive gains. With these stocks on your radar, now might be the ideal time to sprinkle a little holiday cheer into your watchlist.

Note: This article aims to share interesting charts, data points, and thought-provoking opinions. It is not intended as investment advice. If you are considering making an investment, please consult your financial advisor. The content is strictly for educational purposes.

About the author: Brijesh Bhatia brings over 18 years of experience in India’s financial markets as a trader and technical analyst. He has worked with esteemed organizations such as UTI, Asit C. Mehta, and Edelweiss Securities. Currently, he serves as an analyst at Definedge.

Disclosure: The writer and their dependents do not hold the stocks discussed in this article. However, clients of Definedge may or may not own these securities.