Zomato, BHEL, JSW Steel: How to trade these 3 buzzing stocks

Indian benchmark indices kicked off the week with big gains on Monday as the optimism over Maharashtra assembly elections lifted the moods. Also, markets are expecting a recovery from India Inc in the second half of the current fiscals. BSE Sensex zoomed 992.74 or 1.25 per cent to end the session at 80,109.85. NSE's Nifty50 rallied 314.65 points or 1.32 per cent, to settle at 24,221.90 for the day.

 

Some buzzing stocks including Bharat Heavy Electricals Ltd (BHEL), JSW Steel Ltd and Zomato Ltd are likely to remain under the spotlight of traders for the session today. Here is what at  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:

 

Bharat Heavy Electricals | Avoid

BHEL has been oscillating within a broad range of Rs 211-250, indicating a phase of consolidation. Recently, a double-bottom pattern- a bullish reversal structure- emerged on the daily chart, signalling potential upward momentum. However, this pattern lacked confirmation as the price failed to break and close above the key resistance level around 250, which corresponds to the previous swing high. Adding to the cautious sentiment, the price action remains below the 200-DEMA, which is positioned in the Rs 250-251 zone. This alignment of the 200 DEMA with the resistance level strengthens its significance, suggesting that a decisive breakout above Rs 250 is crucial for any bullish continuation. Until BHEL closes firmly above this mark, traders and investors are advised to adopt a wait-and-watch approach to avoid premature entries in an uncertain market phase.

 

Zomato | Cautious

Zomato encountered resistance around the Rs 284 level, which aligns with its previous top. This level has historically acted as a barrier, as seen on the daily chart, where the stock has formed multiple tops. Each time Zomato approached the Rs 284-298 zone, selling pressure emerged, leading to a reversal or consolidation. This repeated inability to sustain above this resistance zone indicates that market participants view it as a strong supply area. Given these factors, we advise a cautious approach for traders and investors. Profit booking is recommended in this range as the stock shows signs of potential top formation, increasing the likelihood of a pullback.

 

JSW Steel | Cautious

JSW Steel found significant support near the Rs 930-935 zone, signalling a strong demand area that has managed to halt the stock's decline. The stock attempted to break out after a period of consolidation. However, despite this breakout, it failed to close above its key resistance level of Rs 978, indicating the persistence of selling pressure. In the subsequent trading session, JSW Steel faced renewed selling pressure in the Rs 975-980 zone, a critical resistance area, eventually settling near the Rs 955 mark. On the hourly chart, a hidden bearish divergence has emerged, which reflects weakening bullish momentum and potential downside risk. Considering these technical signals, initiating long positions at this point is not advisable. A decisive close above 980 on a daily chart is essential to confirm renewed bullish momentum, at which point a more favourable risk-reward setup may emerge. Until then, caution is warranted.