Vinay

@Vinay73536111

10 Tweets • 2024-03-02 •  See on

rattibha.com 

Let’s understand the scanning process in this thread

to filter out best sector and stocks!

Step 1- On daily basis post market closure, you have

to go through the Universe list of stocks.

What is Universe list of stock?

This is a list where you apply minimum basic filter

mostly liquidity to get the names of tradable stocks as
per your position size.

This is the basic filter I use to extract the list on weekly

basis.

Kindly change volume as per your Portfolio size.

Step 2- Now once you have the universe list, Let’s say
you are scanning it in evening after the close.

You have to focus mostly on top movers of the day

approx. 4% or plus ones. You can go even higher like
6% or plus but I check till 4%.

This will give me less than 100 stocks in a day to scan

which is quite normal to do.
Step 3- What all to look for?

1. Are you seeing a bunch of stocks from same

sector/theme/group. If yes then put them into a
separate list to scan further.

2. Are you seeing any stock from already strong sector

either breaking out of a good base or near the
breakout areas. If yes, they again go to shortlist.

3. Ones which are getting very high relative volumes

compared to 50 day average volume like 500% plus,
they also go for further scanning.

Like this you have created a basic list from the big list.
So let’s say from 1000s of stocks you narrowed down
to less than 100 stocks.
Step 4

Now comes very important part , this part you can

perform on weekly basis also as you will get a good
list over the week to study on weekends.

Now through your daily short listing you may have

narrowed down to say 6-7 sectors along with what you
had shortlisted in previous weeks.

First of them segregate the stocks in sector wise list

from here to get a bigger picture and the strength in
sector.

If you don’t already have sector list ready, then add

other stocks from the sectors for further scanning.

Now you have sector wise lists of the strongest

looking sectors.
Step 5:

Here comes the most important stage - Filtering out to

best sectors

Now here we have to use basic sense by asking us

simple question.

Do the sector have big catalyst or possibility of giving

bigger moves over the time or they don’t have much
fuel possibility so a short mover.

For this just think about what the sector is into, For
example - You shortlisted a sector and its chemicals.

Now if you do some research and look for factors

which can help chemical companies do good going
forward at least for few quarters, you will find answers.
Like at this stage just a basic research will tell you that
chemical companies are facing headwinds means the
global scenario is not very much into their favour.
This tells you immediately that there is not much of a
trigger or catalyst to the sector so it’s probably a short
term move and let’s keep it on the list of short term
sectors.

And similarly you searched for another sector where

you saw that huge policies are coming on the sector in
India and worldwide. So means a lot of push is being
given to that area , means a good catalyst and now if
you analyse further by thinking that whether it’s a few
months push or to complete the goal they need long
periods?

This will tell you about whether they are bigger trends
or smaller ones.

You can check this part in detail in the video.

https://youtu.be/Zk7RvlfLaHQ?si=ec1SZjkF

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Step 6:

Like this you have now shortlisted to bigger catalyst

trends sectors and short term sectors.

Isn’t it obvious on which sectors we should be prefer ?

Which ones will have more strength and better

possibilities?

Definitely the ones with the bigger catalyst!!

Now comes the time for Techno funda analysis of

stocks !
Step 7:

Techno funda Analysis of particular stock price action

Now we need to pick better opportunities from the

shortlisted sectors.

First go through their weekly charts and Daily charts to

figure out which ones are at which stage of cycle and
pick the ones with clean price action.

Are they building big base to flag or the bus has been
missed ?

On this basis filter out the best ones where you still
have opportunity left.

You can refer the video to understand trend analysis

in detail.

https://youtu.be/fopx5OMnbzM?si=HsnG07XR

060vtkTs
Step 8 :

Then if you check some fundamentals you can filter

out based on valuations.

Will give just a brief on Fundamentals and leaving the

rest in you to study and figure out the significance of
the terms.

1. ROCE
2. Revenue and profit
3. EPS acceleration
4. PE multiples
5. Debt/ equity

Do your homework and ask doubts in comments for

fundamentals
That's a Wrap!

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Disclaimer: Everything shared above is for learning

purpose only and nothing is in any form any advice.

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