Stock picks of the day: 11,000 defended on weekly basis, further relief likely

Amid global uncertainty, our markets conclude the week with a smart recovery on Friday. Fortunately, we managed to defend the 11000 mark on a weekly closing basis.

Firstly, the index tested the 61.8% retracement level of the previous up move. This point coincided with the '89-EMA' on the weekly chart as well as 161% (Golden Ratio) of the recent small up move from 11108.30 to 12103.05.

Also, the ‘RSI-Smoothened’ oscillator on a daily chart had reached the lowest level since October 15, 2018.

All these key observations were hinting towards the possibility of some relief from the crucial junction of 10800.

Hence, we avoided shorting and kept focusing on some probable short-covering candidates. The strategy played out well and we are back above 11,100.

But, the real question lies whether the worst is over or not? In our sense, it would be too early to comment on this and although we have paused near a crucial technical cluster of supports, we need to wait for some further confirmation.