Stock picks of the day: Short covering could take Nifty towards 11,200-11,250

Indian markets logged sharp gains from its recent lows, as Nifty once again reclaimed 11,100 levels on local bourses on the back of some positive announcements made by the Finance Minister last week along with RBI’s decision to transfer 1.76 lakh crore from its reserves to the government.

From the technical front as well, the Nifty has given almost a V-shaped recovery, after testing its long-term moving averages on the weekly interval as short-sellers were seen covering their positions.

At the current juncture, Put writers are actively adding open interest in 11,000 Put strike which should now act as strong support for the Nifty from an expiry point of view.

However, on the higher side, 11,150 is the immediate hurdle for the index, and if we close above this levels then we could further witness short covering which could take the index higher towards 11,200-11,250 levels.