Tata Motors, ITC, DIvis Labs: Trading Strategies for these buzzing blue-chip stocks

Domestic benchmark indices settled sharply lower on Tuesday, as weak global cues weighed on the domestic sentiment. Headline indices gave up initial gains, thanks to muted economic data from China and geopolitical tensions in the Red Sea. The BSE Sensex dropped 379.46 points, or 0.53 per cent, to settle at 71,892.48. The NSE Nifty50 shed 76.10 points, or 0.35 per cent, to end the day at 21,665.80.

A few stocks of Dalal Street namely Divis Laboratories Ltd, ITC Ltd and Tata Motors Ltd are likely to remain under traders’ radar today. Here is what Pravesh Gour, Senior Technical Analyst at Swastika Investmart has to say on these stocks ahead of Wednesday's trading session:

Divis Laboratories | Buy | Target Price: Rs 4,350 | Stop Loss: Rs 3,840
Divis Laboratories has experienced a breakout of an Inverse Head and Shoulders pattern over a longer timeframe. The breakout is accompanied by significant trading volume and has closed above the breakout level, marking a significant milestone after a span of 16 months. The counter's overall structure is highly favorable, as it is currently trading above all its important moving averages. The RSI shows positive momentum and the MACD supports the counter's current strength. On the higher side, Rs 4,200 is acting as an important psychological level; above this, we one expect a level of Rs 4,350 in the near-short term. On the downside, if there is a correction, the major support level is identified at Rs 3,840.

Tata Motors | Buy | Target Price: Rs 900 | Stop Loss: Rs 730
Tata Motors closed above the Rs 600 level, breaking a multi-year resistance. It subsequently retested the breakout level, before initiating a new upward move toward the Rs 820 level. On the weekly timeframe, a Flag formation breakout, accompanied by significant volumes, has been observed. The stock has consistently found support at the 9- and 20-DMAs and established a pattern of higher high-low. On the positive side, the Rs 820 level represents a crucial psychological level. A breach of this level could propel the stock to Rs 900 or higher in the near term. Conversely, on the downside, the Rs 730 level is recognised as a major support level, which is expected to provide a robust cushion during any corrective moves. Momentum indicators reveal positive momentum, with the RSI signalling strength and the MACD undergoing a bullish centerline crossover.

ITC | Buy | Target Price: Rs 540 | Stop Loss: Rs 440
ITC exhibited a strongly bullish chart pattern, characterised by consistent formation of higher high-low on the daily chart. The overall structure of the stock is appealing, but it is currently encountering several resistance levels, particularly at Rs 480 and Rs 500 levels. A breakthrough beyond Rs 500 could potentially trigger a substantial rally, with a target set at Rs 540. In the event of a correction, the demand level stands at Rs 440. Momentum indicators are currently in a positive position, reinforcing the existing strength of the prevailing trend.


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