Hotel Index Poised for Breakout as Best Buy in Current HL Position

The Hotels & Tourism Index (HOTELS_D) has emerged as a standout performer in the financial markets, capturing the attention of investors with its promising technical setup. As of the latest trading session, the index closed at 6790, marking a notable 1.13% decline, yet its current positioning suggests a potential breakout from a major trend line, making it a top pick for investors seeking growth opportunities.

Technical Analysis: A Bullish Setup in the Making

A detailed analysis of the HOTELS_D chart reveals a compelling setup for the index. The chart, spanning from August 2024 to April 2025, highlights a descending wedge pattern—a classic bullish reversal pattern. The index has been forming lower highs (HH) and higher lows (HL), indicating a consolidation phase within this wedge. This pattern typically signals a buildup of buying pressure, often preceding a breakout to the upside.

Currently, the index is positioned at a higher low (HL) around the 6790 level, a critical support zone that has historically acted as a springboard for upward moves. This HL position aligns with the lower boundary of the descending wedge, which coincides with a long-term ascending trend line (visible in green) that has supported the index since mid-2024. The convergence of these two trend lines at this juncture increases the likelihood of a breakout, as the price is being squeezed into a tighter range, often a precursor to a significant move.

Resistance and Breakout Potential

The upper boundary of the descending wedge, marked by the red trend line, sits near the 6900–7000 range, a key resistance zone where previous higher highs (HH) were formed. A decisive break above this level, particularly with strong volume, would confirm the breakout and could propel the index toward the next major resistance at 7400–7500, as indicated by the red shaded area on the chart. This potential move represents an upside of approximately 9–10% from current levels, making HOTELS_D an attractive buy for risk-tolerant investors.

Volume analysis further supports this bullish outlook. The chart shows a volume of 129.558M, which, while not at peak levels, is sufficient to suggest sustained interest in the index. A spike in volume on a breakout would provide additional confirmation of the move's strength.

Support and Risk Management

On the downside, the index has strong support between 6600 and 6700, as indicated by the cyan shaded area. This zone has acted as a reliable floor during previous pullbacks, reinforcing its importance as a key level for risk management. Investors considering a position in HOTELS_D should monitor this support closely, as a break below could invalidate the bullish setup and signal a deeper correction.

Why Hotels & Tourism Index Stands Out

The Hotels & Tourism sector has been navigating a complex landscape in recent years, with challenges such as inflation, geopolitical tensions, and fluctuating consumer spending. However, the sector is showing signs of resilience, driven by a resurgence in global travel demand, increased business travel, and a growing preference for experiential spending among younger demographics. These fundamental tailwinds align with the technical strength observed in the HOTELS_D chart, making it a compelling investment opportunity.

Conclusion: A Strategic Buying Opportunity

The Hotels & Tourism Index (HOTELS_D) is currently one of the best indices to buy, particularly in its HL position within a descending wedge pattern. The potential for a breakout above the major trend line, combined with strong support levels and favorable sector dynamics, positions the index for significant upside in the coming weeks. Investors are advised to watch for a confirmed breakout above 7000 with increased volume as a signal to enter, while keeping an eye on the 6600–6700 support zone for risk management.

As always, investors should conduct their own research and consider market conditions before making investment decisions. However, for those seeking a high-probability trade with a clear technical setup, HOTELS_D is a standout choice in today’s market.