Trade Spotlight: How should you trade Chennai Petroleum, Devyani International, Dabur, Coromandel, Star Cement, and others on Tuesday?

ITC has witnessed a 15% correction from its recent peak and is now finding support near its previous breakout zone, which coincides with the S3 Camarilla pivot support and the 200-day Exponential Moving Average (DEMA). This confluence of technical supports indicates a potential rebound area. Additionally, the RSI (Relative Strength Index) bullish divergence on the daily chart signals improving momentum, further supporting a recovery scenario. Traders may consider going long above Rs 472, with an upside target of Rs 492, while monitoring key levels for confirmation.

Strategy: Buy

Target: Rs 492

Stop-Loss: Rs 460

Chennai Petroleum Corporation | CMP: Rs 601.4

Chennai Petroleum recently formed a double-bottom pattern after a sharp 54% price correction. On December 19, 2024, the stock displayed a bullish engulfing candlestick with strong volumes, supported by RSI bullish divergence, signaling potential upside momentum. This occurred after testing the S4 Camarilla monthly pivot support. Notably, the November Camarilla pivot’s third layer showed significant width, while December's third layer lies within November's range, creating an "inside value relationship"—a setup that often precedes explosive moves. Traders may consider going long above Rs 600, with an upside target of Rs 670, while monitoring key levels for confirmation.

Strategy: Buy

Target: Rs 670

Stop-Loss: Rs 565

Devyani International | CMP: Rs 177.3

Devyani International recently broke above its previous swing high of Rs 171.50 on the daily chart after forming a triple-bottom pattern with bullish divergence, signaling a strong reversal. This breakout aligns with the R3 Camarilla pivot, reinforcing the bullish sentiment. Furthermore, increasing volumes from the bottom indicate rising buying interest and support the potential for continued upward momentum. Traders may consider going long above Rs 175, with an upside target of Rs 200.

Strategy: Buy

Target: Rs 200

Stop-Loss: Rs 165

Jay Thakkar, Vice President & Head of Derivatives and Quant Research at ICICI Securities

Dabur India | CMP: Rs 509.5

Dabur India has formed multiple bottoms near the Rs 500 level, and the momentum indicator MACD has provided a bullish crossover on the daily charts with a positive divergence, indicating a retracement from the current levels. The immediate target is the previous swing resistance at Rs 534, and beyond that, it is likely to inch towards the Rs 560 level. The futures data indicates that there have been substantial shorts in Dabur, and with this technical reversal, there is a higher probability of a bounce-back, i.e., a retracement of the previous fall. The options data also indicates a higher probability of a reversal, as there is unwinding in Call options strikes from Rs 510 to Rs 530 levels.

Strategy: Buy

Target: Rs 534, Rs 560

Stop-Loss: Rs 498.50

Coromandel International | CMP: Rs 1,862.7

Technically, Coromandel has been forming higher tops and higher bottoms. It has broken through multiple swing resistances on a closing basis. The momentum indicator MACD (Moving Average Convergence Divergence) is also well in the buy mode on the daily charts, indicating bullish momentum for the short term. On the derivatives front, the stock has seen an increase in open interest with a rise in price, indicating a long buildup. The options data shows that there have been significant additions in the Put front from Rs 1,800 to Rs 1,860 strikes, with the Rs 1,800 strike having the highest Put open interest, while the Rs 1,900 Call has the highest open interest. Hence, there is no major hurdle until Rs 1,900 levels.

Strategy: Buy

Target: Rs 1,940, Rs 1,980

Stop-Loss: Rs 1,810

Tech Mahindra | CMP: Rs 1,712.4

Tech Mahindra has broken through multiple trendline supports, with a sell crossover in its MACD momentum indicator on both the daily and weekly charts, showing a negative divergence and indicating further weakness in the near term. During the formation of the negative divergence, the futures data indicates that the stock initially saw long unwinding, and now, with the breakdown from critical levels, it is witnessing short buildup. Therefore, a short-term correction is expected in the stock. The options data also indicates weakness in the near term, as the Call base is larger than the Put base, suggesting that the bears have the upper hand in the short term.

Strategy: Sell

Target: Rs 1,640, Rs 1,600

Stop-Loss: Rs 1,762

Anshul Jain, Head of Research at Lakshmishree Investments & Securities

HDFC Bank | CMP: Rs 1,801

HDFC Bank has successfully retested its base-on-base pattern after enduring five consecutive down days, stabilizing at the Rs 1,780 level. Monday's session closed with a bullish kicker candlestick pattern, signaling a strong reversal on the daily charts. With these technical indicators aligning, HDFC Bank presents a compelling buy opportunity, with an immediate upside target of Rs 1,900 levels. Investors should watch for sustained momentum in the days ahead.

Strategy: Buy

Target: Rs 1,900

Stop-Loss: Rs 1,770

Star Cement | CMP: Rs 237.3

Star Cement has surged with a breakout from a 131-day bullish Cup and Handle pattern, accompanied by a 550% spike in volumes above the 50-day moving average. This technical breakout is a strong bullish signal, reflecting heightened investor interest and robust momentum. Adding to the optimism, takeover speculation in the cement sector has further amplified buying activity, pushing the stock into the spotlight. Currently positioned at Rs 237, Star Cement offers a compelling buy opportunity with an upside target of Rs 290. With strong technicals and market buzz, the stock is poised to deliver significant gains in the near term.

Strategy: Buy

Target: Rs 290

Stop-Loss: Rs 220

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