Process - Potential BUY candidates
By now we know which stock groups to look at and play a safe bet with appropriate risk/reward.
How do we identify potential BUY candidates?
- Stock has to be above its 50 day and 200 day simple moving averages (applicable for stocks where holding period is small to medium term)
- Earnings result announcement for the selected stock should not be within a month
- If the company is in some special news such as merger/ take over/ bankruptcy/ new product launch/ etc, then please evaluate the news as per your judgement before buying the stock. Company/Sector news can significantly affect stock price
- Stocks which shows upward momentum and are currently consolidating as can be seen from examples shown in previous page, Once the stock break the consolidation area then it is our buy trigger
- DO NOT FORGET to check the overall market direction before entering any position
Now that we are aware of the technique and strategy lets look at various groups mentioned earlier. We have created group wise list which will help you identify potential BUY candidates, this will provide you with a starting point to make your own decision of choosing the right stock for your portfolio.
Typically all the list under Group 1 are updated everyday after market close by 7pm.
Things to remember:
Group 1: Stock Investment in Index Components (short/medium term holding period)
Index component list -
1. Nifty Mid-Cap 50 stocks
2. CNX Small-Cap Index (100 stocks)
3. CNX 100 stocks
4. CNX Nifty Junior (50 stocks)
5. S&P CNX Nifty (50 stocks)
6. S&P CNX 500 stocks
- S&P CNX 500: 1 to 100 List
- S&P CNX 500: 101 to 200 List
- S&P CNX 500: 201 to 300 List
- S&P CNX 500: 301 to 400 List
- S&P CNX 500: 401 to 500 List
Group 2: Value / Growth Investing (long term holding period)
Value Investor Rakesh Jhunjhunwala (On left side under Gurus select this name to view current portfolio holdings)
Other resources:
Value Investing - Core Concepts
Available FREE Screener:
Buzzing Stock Screener:
Under Technical Stock Screener box enter "Close <= YH*1.02 and Close > YH * 0.95 AND Volume > 1000000" and click find stocks button.
Screener.in: Its free (requires registration to write your own filter), check below example
Darvas Scan - With in 10% of 52w high AND Up 100% from 52w low AND Current price > 10 AND Volume > 100,000
TradersCockpit - Free screener for registered users
Once you get the list from above screen-er then use following to research the Stock rating:
Reuters Stock Analysis - make sure you check Analyst rating along with Earnings/Sales estimates
Reasoning: Above criteria ensures that the selected stocks have sufficient liquidity, 15% within their 52w high and have good earnings. Typically, all this should lead the stock higher in near future depending on favorable market conditions. Keep these stocks on your watch list, wait for stock to setup and consolidate or pullback, buy once the consolidation/pullback is broken on up side.
Group 3: Dividend Income (mid to long term holding period)
Income generating stocks:
TOP Dividend Stocks
S&P CNX Nifty highest dividend stocks
Dividend Opportunities Index
Things to remember:
- Highlighted stocks are potential BUY candidates and does not necessarily mean we should buy them right away
- These selected stocks will typically become our watch-list
- Check the example provided here which will tell us what to look for before we BUY a particular stock
- Do not forget to have a STOP LOSS once you enter any position
Group 1: Stock Investment in Index Components (short/medium term holding period)
Index component list -
1. Nifty Mid-Cap 50 stocks
2. CNX Small-Cap Index (100 stocks)
3. CNX 100 stocks
4. CNX Nifty Junior (50 stocks)
5. S&P CNX Nifty (50 stocks)
6. S&P CNX 500 stocks
- S&P CNX 500: 1 to 100 List
- S&P CNX 500: 101 to 200 List
- S&P CNX 500: 201 to 300 List
- S&P CNX 500: 301 to 400 List
- S&P CNX 500: 401 to 500 List
Group 2: Value / Growth Investing (long term holding period)
Value Investor Rakesh Jhunjhunwala (On left side under Gurus select this name to view current portfolio holdings)
Other resources:
Value Investing - Core Concepts
Available FREE Screener:
Buzzing Stock Screener:
Under Technical Stock Screener box enter "Close <= YH*1.02 and Close > YH * 0.95 AND Volume > 1000000" and click find stocks button.
Screener.in: Its free (requires registration to write your own filter), check below example
Darvas Scan - With in 10% of 52w high AND Up 100% from 52w low AND Current price > 10 AND Volume > 100,000
TradersCockpit - Free screener for registered users
Once you get the list from above screen-er then use following to research the Stock rating:
Reuters Stock Analysis - make sure you check Analyst rating along with Earnings/Sales estimates
Reasoning: Above criteria ensures that the selected stocks have sufficient liquidity, 15% within their 52w high and have good earnings. Typically, all this should lead the stock higher in near future depending on favorable market conditions. Keep these stocks on your watch list, wait for stock to setup and consolidate or pullback, buy once the consolidation/pullback is broken on up side.
Group 3: Dividend Income (mid to long term holding period)
Income generating stocks:
TOP Dividend Stocks
S&P CNX Nifty highest dividend stocks
Dividend Opportunities Index