Stock picks of the day: Revival possible in September; avoid creating shorts in Nifty

Nifty50 managed to reclaim the 11,000 mark on a closing basis for the week ended August 30.

The closing beyond 11,000 was crucial not only because it’s a psychological junction; but also in terms of technical, because with this we concluded the August Month with some important clues left behind for us.

Let’s see what we are exactly referring to: (i) recent correction got arrested around the 61.8% retracement level (10,637) of the previous up move, (ii) we could see a formation of ‘Bullish Piercing’ pattern on the daily chart on August 23, (iii) Friday’s recovery happened from key retracement ratios and formed a ‘Bullish Hammer’ and most importantly, (iv) Monthly candle concluded above 20-EMA, which remained as a crucial support on a closing basis since March 2016 and depicts a bullish ‘Dragonfly Doji’ pattern.

We were hopeful since the last couple of days but now looking at these multiple observations, it has certainly fuelled our conviction level.