Ruchit Jain of 5paisa recommends buying Tata Steel and Pidilite Industries for tomorrow

Domestic benchmark equity indices, the Sensex and the Nifty 50, ended Monday's trading session on a positive note with modest gains led by metal stocks on the back drop of robust China data, news about Tata Steel block deals, and copper prices that were at a record high globally.The 30-share BSE Sensex ended higher by 104.99 points or 0.14% at 72,748.42 level while the Nifty 50 closed at 22,055.70 level, up 32.35 points or 0.15%.

However, the stress test rule for mutual fund schemes for small and midcap stocks by the Securities and Exchange Board of India (SEBI) kept broader markets under pressure.

The Nifty Midcap 100 closed 0.39% down while the Nifty SmallCap 100 closed 0.57% lower.

Investors are currently awaiting Japan's central banks' and the US Federal Reserve's policy decisions going forward tomorrow.  This week's market direction will be determined by the US Federal Reserve, Bank of Japan, and Bank of England, among other global central banks, according to Vinod Nair, Head of Research at Geojit Financial Services.

Short-term sentiment  should be mixed due to the US Federal Reserve's indication that a rate cut is likely to occur in the second half of 2024.Nifty 50 continued to consolidate within a narrow range in Monday’s sessions and ended the day above 22,050 with marginal gains, said Ruchit Jain, Lead Research Analyst at 5paisa.

Post the sharp sell-off on last week’s Wednesday, Nifty has traded within a narrow range in the last three sessions. The index has given a breakdown from a Rising Wedge pattern during the sell-off, but the important 40 DEMA support is still intact, and the index has been hovering around this support since last three sessions.

In the options segment, open interest addition was seen in 22,200 can 22,300 call options, while 22,000 put has decent open interest outstanding. Thus, the data as well as the chart structure indicate a near-term consolidation where 21,900 would be seen as an important support while 22,200 as the hurdle. Only a breakout beyond this range will lead to a near-term directional move. Traders should thus keep a close watch on the range and trade in the direction of the breakout once seen, advised Jain.