Intraday Trading Stock Selection

Introduction

• Video covers 7 simple steps to help with stock selection for intraday and day trading.
• Start with Part 1 of intraday trading series for a foundational understanding.
• Importance of having a limited watchlist of 10-15 stocks.
• Importance of sector selection (primary: banking and financial services, secondary: infrastructure, realty, metal, auto, energy).

Step 1: Check for Volumes

• Trading volume indicates momentum and confirms trend.
• High volume suggests more interest; low volume suggests less interest.
• Use a 100-day moving average on a volume chart to identify stocks attracting attention.
  • Avoid stocks with past high volume but current low volume.
  • Focus on stocks with consistent volume spikes above the 100-day average.

Step 2: Check for Open Interest Trend

• Open interest indicates flow of money into a stock.
• Rising open interest typically suggests strengthening market trends.
• Consider current month's open interest, especially near expiry.

Step 3: Check for Volatility

• Use historical volatility indicators.
• Volatile stocks offer more profit opportunity; avoid low volatility stocks.
• Target stocks with increasing volatility trends.

Step 4: Check for 52-Week Highs/Lows

• Stocks near 52-week highs/lows often make wide-range candles indicating movement.
• Such stocks have high demand or supply.

Step 5: Check for Trending Stocks

• Avoid range-bound stocks; select those trending higher or lower for 2-3 months.
• Movement, trend, and momentum are crucial for intraday trading.

Step 6: Check Demand and Supply Candles

• Use candle volume charts to identify demand and supply.
• Focus on stocks where demand and supply candles are visible.

Step 7: Check Relative Strength Trends

• Relative strength is the stock price divided by benchmark index price.
• Prefer stocks outperforming the market for buying, underperforming for short selling.
• Focus on short-term relative strength trends.

Application of Stock Selection Steps

• Demonstration with banking sector stocks: Axis Bank, State Bank of India, Yes Bank, Kotak Mahindra Bank, ICICI Bank, Indus Ind Bank.
• Emphasis on using multiple parameters, such as demand/supply candles, volume, and relative strength.

Additional Tools: Rollover Data and Gaps

• Rollover Data: Identifies high probability stocks based on future positions.
• Gaps: Used to shortlist stocks; ensure alignment with the seven criteria.

Pre-Market Research

• Focus on research before market opens.
• Only target watchlist stocks showing price and volume movement during pre-market.

Conclusion

• Consistent framework and preparation are key to intraday trading success.
• Focus on thorough analysis before market hours to develop clear actionable plans.

Note: The importance of ignoring news and earnings seasons for consistent stock selection and the use of a structured framework for long-term benefits.