Stock picks of the day: Nifty conquered 20-Day EMA for the first time after Budget day

Nifty50 surged 229 points on Monday, to post its highest absolute gains since 20-May. It closed at 11,058 levels. The move was largely on the back of a series of measures announced by the Finance Minister last Friday to build the confidence of the capital markets and auto industry.

By closing at 11,058 levels on Monday, the Nifty50 conquered its 20-days EMA hurdle for the first time after the budget day. The Nifty50 was facing resistance around its 20 days Exponential moving average and reversed south the moment it touched since the breakdown seen on the Budget day.

Moreover, last Friday, the Nifty has formed bullish “Piercing line” candlestick pattern on the daily Charts. This pattern usually indicates a trend reversal.

The Relative Strength Index (RSI) Oscillator has also formed positive divergence on the daily chart of Nifty and Bank Nifty. In the derivatives, we have seen the first sign of long build-up in the Nifty Futures on Monday.

Amongst the Options, we have seen Put writing at 10,800-11,000 strike prices, indicating strong support around these levels for the coming days.

Unless Nifty closes below it, the trend would be considered bullish for the markets. On the upside, 11,200 level is likely to act as an immediate resistance where Calls have been written.