Stock Picks of the Day: 3 stocks that could return 12-14%

The markets have seen a smart recovery after the Monetary Policy Committee meeting last week, which was majorly led by short covering and build-up of longs at lower levels.

The Nifty once again reclaimed 10,800 levels on Tuesday which placed call writers in the somewhat uncomfortable situation. In the recent rally, call writers were seen aggressively covering their short positions while put writers were observed creating fresh positions in 10,600, 10,700 and 10,800 strikes.

Strong support is seen 10,750, 10,700 and 10,650 levels. Going forward, the Nifty will see short covering on every dip as derivative data supports the current strength.

Open interest is continuously moving up, indicating a positive move. The current trend is likely to continue towards 10,900-10,925 levels.