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The process are
1. Identify the Market direction
2. Check the Market Advance/ Decline ratio
3. Check the Sector Contribution
4. Index Selection
5. Stock SelectionMarket Direction- Advance/ Decline
Sector Contribution- Index wise analysis.
Stock Selection- Stock out performance
Intraday analysis is done using the Top Down Approach.
The process of identifying the momentum stock in Intraday is as follows :-
1. Identify the Market Direction i.e, whether the market is +ve or -ve.
2. Check Market Breadth (Advance / Decline)
3. Check sector contribution that is weighing for the market direction.
4. Check the Index contribution for the current prevailing market direction.
5. Take top two sectors that is the major contributor for the prevailing market direction.
6. Now Filter top 4 stocks from the filtered sectors.
7. Again filter the stocks that is trading with the high volume.
Now we have narrowed down with the stocks that are hot to trade in the Intraday market, we are now ready to execute the trade and we need to make sure that the trade is executed along with the trend of the market.
Buy and sell the stock in uptrend market condition and Sell and buy the stock in a downtrend market.
The simple ways to identify the momentum of stock market are here:
Market direction :Market direction is the sentiment of the day,we have to check market advance/decline and then select the companies whose prices are up.
Sector contribution:Find the sectors who got good growth and select the top 5 sectors having good price and analyse their Index which is contributing to the market trend.
Stock selection:Now in the top 5 compare and select the top 3 companies and analyse their price wise and turnover wise growth.
And finally select the company having good volume.
All these things have to be done in minutes of time for the INTRA DAY purpose.
If you find certain shares of yours losing then wait to sell them until Stop loss point.
The momentum stock needs to be identified with the analysis of various parameters.
Market direction needs to be analysed using the global market movement along with Indian market(Nifty), and need to find whether the sentiment of the market is positive or negative. Foreign Individual Investor(FII) activity also needs to be considered.
Market Advance/ Decline ratio needs to be analysed using the market breath chart(Counterwise and turnover basis) and need to arrive whether it align with the market direction as positive or negative.
Sector Contribution: Based on this direction, need to identify the sector which contributes majorly for this trend and the corresponding sector needs to be selected.
Index Selection: The major index that contributes to the market direction needs to be identified and selected for further analysis.
Stock Selection: The stocks come under that index needs to be analysed on price wise and turn over wise and the stock which is contributing high on both price and turn over needs to be selected for trading.
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