Tata Motors, Zomato, Sun Pharma: How to trade these 3 buzzing largecap stocks

Indian benchmark indices kicked-off the week on a muted note on Monday and settled lower, extending the losing steak to seventh session. A muted earnings seasons, along with mixed global cues dented the sentiments. BSE Sensex dropped 241.30 or 0.31 per cent to end the session at 77,339.01. NSE's Nifty50 tanked 78.90 points or 0.34 per cent, to settle at 23,453.80 for the day.

Some buzzing largecap stocks including Sun Pharmaceuticals Industries Ltd, Zomato Ltd and Tata Motors Ltd are likely to remain under the spotlight of traders for the session today. Here is what Jigar S Patel, Technical Research Analyst, at Anand Rathi Shares and Stock Brokers has to say on these stocks ahead of Tuesday's trading session:

Sun Pharmaceuticals | Avoid

Sun Pharma currently appears to be in a weak technical setup, as the stock has breached its 100-DEMA and is showing signs of further downside. The next significant support level seems to be around the 200-day DEMA, which is approximately Rs 1,642. This level holds additional importance as it coincides with the 50 per cent Fibonacci retracement of the stock's prior upward move, as indicated by the chart. The RSI is trading consistently below 50, signalling bearish momentum and hinting at continued weakness in the near term. Given these factors, it is advisable to adopt a cautious approach, waiting for a clearer technical setup before entering long positions in the stock. For now, a 'wait and watch' stance is recommended to avoid catching the falling knife.

Zomato | Caution | Resistance: Rs 280 | Support: Rs 240

Zomato recently witnessed a strong reversal from the Rs 240 level, delivering an impressive bounce in just 7-8 sessions. This swift upward movement indicates significant buying interest around the Rs 240 mark, showcasing the stock's ability to recover sharply from lower levels. However, the rally now faces a crucial hurdle near the Rs 280 mark, which acts as a stiff resistance zone. This resistance is likely to cap further upside in the short term as it could attract profit booking and selling pressure. Given the proximity to this resistance level, it is prudent to lock in profits around the Rs278–Rs 280 zone to capitalize on the recent rally. Moreover, fresh long positions should be avoided until the stock decisively breaks and sustains above the Rs 280 mark, signaling a continuation of the uptrend. This cautious approach minimizes risk while preserving gains from the recent bounce.

Tata Motors | Caution | Resistance: Rs 850 | Support: Rs 700

Tata Motors has experienced a significant decline, raising concerns about its technical position. From an indicator perspective, the DMI on the monthly chart is signalling caution. The ADX line is notably higher than both the positive and negative DMI lines, suggesting a potential shift in momentum. Additionally, a bearish divergence has appeared, further confirming a potential downward trend. A long-standing 4-year bull trendline has been violated on the monthly chart, indicating the possibility of further weakness. As we move forward, it is advisable to book profits on any decent bounce from here on, with support anticipated around Rs 700 and resistance near Rs 850. Given the technical indicators pointing towards a potential top formation, a correction could be expected in the next 1-2 months. Caution is warranted when dealing with Tata Motors in the near term.