How to Select Stocks for Intraday Trading?

How to Select Stocks for Intraday Trading ? It’s very big Question. One of the most dilemma or difficulty faced by traders is selection of good stocks. Out of the 5000 listed companies on BSE and 1500  in NSE and many more emerging, it becomes difficult to choose the few right stocks and invest in it. Moreover, it becomes even more difficult to scan and select a few stocks for day. To make the complex selection process easy, following are the few techniques for How to Select Stocks for Intraday Trading that can be helpful as well prove profitable.

How to Select Stocks for Intraday Trading

1. Price Based Stock Selection

Each stock price fluctuates daily giving daily open, close, high and low prices. Among these four prices, high and low prices can be beneficial to select stock.

When prices rises 52 week high or falls below 52 week low there are chances of increase or decrease of prices respectively. Such a signal can be helpful to know

Whether to trade in a particular stock or not.

Step to Find Out 52 Week High – Low Prices of Stock :

  1. Go to nseindia.com
  2. Select LIVE MARKET
  3. Under LIVE MARKET ANALYSIS, select NEW 52 WEEK HIGH-LOW.
  4. Direct URL:

https://nseindia.com/products/content/equities/equities/eq_new_high_low.htm

NSE India 52 Week High Low Stock

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2. Sectoral Stock Selection

Sector identification and analysis is necessary to select stock. Sectoral performance is as important as stock performance. Selected Stock based on poor performance of sector may not fetch good returns. Hence, it is important to review the sectors having good momentum.

Steps to Find Out The Active Sectors

  1. Go to www.nseindia.com
  2. Select LIVE MARKET
  3. Under LIVE MARKET, select INDEX.
  4. Index will show a list of various indices i.e. sectoral indices, strategy indices etc.

Direct URL:

https://nseindia.com/live_market/dynaContent/live_watch/live_index_watch.htm

NSE India - Index

NSE India - Live Market Index

Its very usefull techniques for Topic of How to Select Stocks for Intraday Trading ?

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3. Using Market Price Trend For Stock Selection

STEPS :

  1. Observe and Compare the current market price of NSE and BSE for 5 minutes continuously.
  2. If CMP (current Market Price) of
  • NSE > than BSE, Short term trend is up, prices are expected to rise only till NSE is higher than BSE.
  • NSE  < than BSE, Short term trend is down and prices are expected to fall only till NSE is smaller than BSE.
  • NSE = BSE, Short term trend is neutral and price is expected to fluctuate.

THROUGH THE ABOVE STEPS WE CAN FIND MARKET TREND. BASED ON THIS WE CAN SELECT THE STOCKS FOR DAY TRADING.

NOTEIT IS BENEFICIAL TO SELECT STOCK OF REPUTED COMPANIES HAVING HIGH VOLUMES.

It is Beneficial To Select Stock Of Reputed Companies Having High Volumes. It’s simple way to pick stocks for intraday trading.

Example:

Moneycontrol Image

In above image(screenshot from Moneycontrol application) showing trading prices of NSE higher than BSE. It indicates very short trend or day trend to be still up and stock is expected to rise. One can buy the stock at suitable entry levels.

Moneycontrol Image 2

In above image (screenshot from Moneycontrol  application) showing trading prices of NSE lower  than BSE. It indicates very short trend or intraday trend to be down and stock is expected to fall. One can sell the stock at suitable entry levels.

Moneycontro Image 3

In above image (screenshot from Moneycontrol application) showing trading prices of NSE  and BSE neutral. It indicates very short trend or day trend to be neutral and stock is expected to fluctuate for very short term.

4. Stock Trading Strategy

  • Using this strategy, you can get a chance to earn profit if you find a particular stock having upside trend and has continuously rise 15-20% in last 3-5 sessions. Such stocks can be easily found out from various site such as moneycontrol, nseindia.
  • Such strong upside trends are followed by a sharp PULL BACK of 3-10% in a single day because of profit booking.
  • To get the advantage of profit booking, one needs to identify and confirm the pull back .

Following Steps Will Help and Confirm The Pullback

  1. Select stocks as above instructed .Watch its price moment and note the opening price and closing price.
  2. If the stock is trading below its opening price around 9:30 AM then sell stock near its opening price with stop loss of the particular day’s high .
  3. Previous Day’s high should be noted as after reaching that point the prices will quickly fall.

The opposite strategy i.e. pull back after a strong downward move (15%-20% down in last 3-5 sessions). However, this  opposite strategy is less accurate.

Example:

Suppose “Infosys” rise from 900-1100 in last 3-5 sessions and today opened at 1090, given high 1120 and now trading at 1080-1089 around 9:30 AM, previous day close was 1075. There is a good opportunity to sell the stock around 1090(near opening price) with strict stop loss above 1120(above day’s high).

Get good profit. If the stock breaks and holds below 1075, there may be a quicker fall.

5. Gap up or Down Strategy

Gap up generally is a break between prices in chart that occurs due to sharp up or down move of prices with no trading in between. Such gap up-down can mainly create 2 opportunities :-

How to Pick Intraday Stocks

#Buying Opportunities:

Buying opportunity is generated when stock opens by margin gap up of 1%-2% of previous close and  touches previous day close after the gap up opening but then bounce back and again  breaks  the day’s opening price with stoploss set at day’s low .

Example:

BATA INDIA LTD

Previous day close : 400        Today open price:408

Previous day high: 405           Today low price: 401

There is a gap up opening at 408, giving low of 401 (between previous day’s high and close) but now bounced back and trading again  above 409 for 5-10 minutes. Here one can buy  BATA INDIA LTD around 408-409(above its day’s open price) with stop loss of  403(below previous day’s high) for targets of 410.

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#Selling Opportunity:

Selling opportunity is generated when stock opens by gap up of 5-10% of previous close and breaks below its opening price with day’s high as stoploss and target of previous day’s high and previous day’s close.

Example:

BATA INDIA LTD

Previous day close :400        Today open price:420

Previous day high:405           Today high price:425

There is a gap up opening  at 420 ,giving high of 425 and now trading at 415 (below its day’s open price) for 5-10 minutes. Here one can sell  BATA INDIA LTD around  420(near its open price) with  stop loss  of  426 for targets of 406-400(near previous day’s high and close).

https://www.nseindia.com/live_market/dynaContent/live_watch/live_index_watch.htm

There are many other techniques which are based on technical parameters such are MACD, RSI, Bollinger Band, Finding Retracement Level, Support and Resistance etc.

NIFTY TRADING ACADEMY provides various free blogs to help an individual to obtain proper and right knowledge on trading.

Disclaimer : The above blog is for educational purpose. These techniques should be properly studied and then applied. We are not responsible for any Loss suffered using these techniques. We hope that you like our blog on ” How to pick stocks for intraday trading ?”