Tata Communications, Trend, Tata Chemicals: Trading strategies for these buzzing Tata stocks

Indian benchmark indices scaled new highs during the trading session on Wednesday ahead of the monthly expiry of the F&O contracts. Strong growth forecast, softened inflation and improved balance sheets supported the buying in largecap counters. BSE Sensex surged 620.73 points, or 0.80 per cent to end at 78,674.25. NSE's Nifty50 index jumped 147.50 points, or 0.62 per cent, to settle at 23,868.80 at the close.

Some buzzing Tata Group stocks namely Tata Communications Ltd, Trent Ltd and Tata Chemicals Ltd are likely to remain under the spotlight of traders for the session today. Here is what Laxmikant Shukla, Technical Research Analyst at YES Securities has to say on these stocks ahead of Wednesday's trading session:

Trent | Caution | Resistance: Rs 5,700 | Support: Rs 5,000

Trent has been consolidating sideways for the past seven days, showing no clear directional bias. On the daily chart, it has encountered significant resistance in the Rs 5,460-5,700 range. The repeated formation of doji candlestick patterns indicates market indecision. Conversely, a strong support base has formed around the Rs 5,000 level, near its 20-day SMA. Therefore, a decisive breakout in either direction is eagerly anticipated to establish a clear trend.

Tata Chemicals | Buy | Resistance: Rs 1,240 | Support: Rs 1,030

Tata Chemicals recorded a peak in the month of March 2024, thereafter it retraced 61.8 per cent of the previous rally off February 2024 low to March 2024 high. Series of ascending tops and bottoms on the weekly chart suggests a reversal move. The momentum indicator RSI further reinforces the bullish sentiment by consistently staying above the critical level of 50. Regarding support and potential gains, the stock has established a robust foundation at the lower end, around Rs 1,040-1,030 zone. Buy for a target of Rs 1,240 with stop loss of Rs 1,030.

Tata Communications | Caution | Resistance: Rs 1,880-1,925 | Support: Rs 1,700

Tata Communication has experienced downward pressure in the past three weeks. This gradual decline has brought prices down towards the key support zone around Rs 1,800 near its 200 SMA. Additionally, at a similar level, the line of parity is evident, which could act as an additional support for the stock. Looking forward, if the mentioned support levels hold, we may anticipate a bounce towards the Rs 1,880-1,925 zone. However, failure to maintain the mentioned support level would indicate a continuation of the selling pressure, potentially pushing the stock towards Rs 1,700.

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