Buy or sell: Ruchit Jain of 5paisa recommends buying Tata Steel and Pidilite Industries today

Stock Market News: 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%.

Also Read: Stock market today: Sensex, Nifty 50 end in the green; auto, metal stocks shine

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.

Also Read: Federal Reserve meet in focus: Will the Fed give clear signals on rate cuts? Top experts weigh in

"Exciting news! Mint is now on WhatsApp Channels 🚀 Subscribe today by clicking the link and stay updated with the latest financial insights!" Click here!

Market Review and Outlook - Ruchit Jain

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.

The midcap and smallcap indices witnessed a sharp sell-off last week, but some sharp pullback moves in selective stocks have been noted. However, there’s no confirmation yet on the sector resuming its uptrend as of now, and hence, there could be some correction or consolidation in the short term, said Ruchit. 

Also Read: Tata Steel, JSW Steel, Jindal Steel Power, SAIL share prices gain up to 5% on strong China industrial output numbers

Stocks To Buy Tomorrow - Ruchit Jain

On stocks to buy tomorrow, Ruchit Jain recommends two stocks - Tata Steel Ltd and Pidilite Industries Ltd. 

Tata Steel Ltd

Ruchit stated that the stock has been forming a ‘Higher Top Higher Bottom’ structure and is thus in an uptrend. The recent price-up move has been supported by good volumes, whereas the volumes on corrections are low, which is a positive sign. Stock has bounced from its 89 DEMA support and is hinting at buying interest by market participants on corrections. Hence, positional traders can look to buy the stock in the range of ₹147–142 for potential targets of ₹156 and ₹164. The stop loss on long positions should be placed below ₹138.

Pidilite Industries Ltd

Jain explained that prices have shown a relative outperformance in the recent past as it outperformed the broader market in the corrective phase. The RSI oscillator is hinting at positive momentum, and hence, we expect the uptrend in the stock to continue. Traders can look to buy the stock around ₹2,920 and add on dips towards ₹2,850. The potential targets for the stock are seen around ₹3,020 and ₹3,150, while stop loss on long positions should be placed below ₹2,800.

Also Read: Tata Sons to sell 23.4 million TCS shares worth ₹9,000 crore in block deal

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.