Here stocks that have turned up on my swing/position trading scan:
TATAMOTORS, TCS, INDHOTEL, HDFC, INFOSYSTCH
TATAMOTORS is a bit extended and will probably pullback a little more. But it all again depends on what the market is going to do. If the market corrects significantly then most large stocks would also correct. There are few other stocks that were selected by my scan but I have removed them because I didn’t like the charts. I usually discard stocks that have erratic (very volatile) charts.
One thing I would insist is – please do your own analysis on these. These stocks are just ideas, they are relatively oversold in the short-term and they could be traded using good risk management strategy. I usually trade these as part of the strategy I have described in one of my previous posts. As part of the strategy I buy stocks when they break above the previous bar highs.
Analysis
NIFTY has been in a relatively sideways trend in the past two weeks. It would be interesting to see how it tackles the recent highs, if it breaks through we would see another move upward. If NIFTY breaks to new highs I would be loading up on stocks like the ones above which would certainly trigger buy signals.
Hiren said
Own analysis:-
I am more familiar with RSI and ADX and so are my observations. ADx above 45 very dicey.
TCS-Daily rsi has struggled to go below 60 but daily ADX is approaching 40. Considering adx signal, don’t yu think it is dicey. Rsi is supportive
Tata Motors- RSI showing negative divergence and sliding down. That could be a cause for concern though ADX is favorable.
Ind hotel- Then ADX(14) is 54 and declining. RSI is ok
HDFC-This to me looks more favorable. Both RSI and ADX all right.
Infosys-Daily RSI struggling to go below 60 and ADX also favorable.
Hiren said
You have talked about recommending more stocks on what the mkt is going to do. What does your mkt analysis like newhigh new lows etc show?
Hiren said
Since a majority of these are sideways should one wait for breakout or buy against previous bar highs?
Should one wait for nifty breakout?
If breakout buy, one has to filter further on the basis of high volume?
SwingTrader said
>>TCS-Daily rsi has struggled to go below 60 but daily ADX is approaching 40. Considering adx signal, don’t yu think it is dicey.
You should never mix too many similar indicators. We already are using two EMAs for analysis of trends. ADX indicator is based on price too so it would just add to the confusion. Analyzing ADX is very tricky, you cannot form any opinions just based on its value. When ADX is falling the uptrend can continue for a long time or ADX can just stay above 40-45 for long time. VOLTAS is a good example (Aug-Sep 2005). If you are using ADX then you should stick to it only and not use EMAs. I use EMAs and do not bring in any other price based indicators into the analysis.
I don’t use RSI so I cannot comment on it much.
Price is the ultimate indicator. I use the price itself to confirm signals. For example, I would not initiate a trade if the stock that is in an uptrend breaks below the most recent swing low.
SwingTrader said
>>Since a majority of these are sideways should one wait for breakout or buy against previous bar highs?
If you already have few positions in the market you can probably just wait and see what happens in the next 1-2 days. If you don’t have positions you can initiate 1-2 new positions if the charts look good. We will probably get better signals if the market pullsback a bit.
SwingTrader said
>>If breakout buy, one has to filter further on the basis of high volume?
I believe volume is critical if you are a breakout trader. If there isn’t good volume support on a breakout there is a very good chance that it will fail. Even if it doesn’t I think it is best to leave the stock alone.
Of course, this is true only if the breakout is from a well formed base and not just from a simple retracement in an uptrend in which case there may or may not be too much volume support.
Hiren said
“I would not initiate a position if in an uptrend price breaks below the most recent swing low.”Swing low implies previous bottom? Thanks for clarifying doubts.
SwingTrader said
By swing low I mean the lowest price of the most recent pullback.