Suggest some best stocks for swing trading in Indian Stock Market?
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Generally, I use to trade based on the following patterns
Every week I filter more than 1000 stocks for swing trading. A few of the stocks I have shortlisted for the 1st week of January 2022 are.
1. IRCON International
View: Bullish
I have shortlisted this stock based on the Rising Wedge pattern, It took the support at the bottom line of the pattern.
Also, the company is fundamentally good, so I choose this for swing trading (7 to 15 days).
2. JK Cements Ltd.
View: Bullish
The next best stock I have chosen for Swing Trading is JK Cements. This also took very good support at the bottom line of the pattern.
I would like to buy this stock and hold it for 10 to 15 trading sessions.
My stop loss for this stock is below the bottom line of the Rising Wedge pattern.
3. Jain Irrigation
View: Bearish
The stock has formed Falling Wedge Pattern and it is facing strong resistance at the top line of the pattern. So I am bearish on this stock for 7 to 10 trading sessions.
Stop Loss: My stop loss is above the top line of the pattern.
Note: I am not the SEBI registered advisor, the above stocks are given for informational/ educational purposes only.
Choosing mid cap and small cap stocks gives ultimate returns rather than choosing index stocks but the risk is very high.
If you are not a risk taker, then I suggest you to choose the F&O Equity stocks. Most of the swing traders earn a lot when the market is bearish.
Choosing Equity stocks that are available in F&O gives an option to go short for more than 1 day.
You can simply sell the futures if you turn bearish.
Choosing mid and small cap stocks can only be traded for long positions.
Best Stocks for Swing Trading in India
Before getting into purchasing stocks, more importantly when you are involved in swing trading you must make a proper selection of the best stocks.
Every registered company needs to release an annual report in which they make a mention of parameters of greater significance. These key parameters are spoken in detail by company annual reports known to be fundamental indicators.
By applying these parameters you can filter the best stocks for the heap of stocks in the stock markets.
These parameters have gained importance and from which, you can identify stocks with good growth, current debt levels of the stocks, profitability.
In addition, you will be able to identify the most favoring price movements in the defined timeframes.
Not to waste much of your and others time, I would recommend you to concentrate on the financial parameters.
They are Price to Earning to Growth ratio (PEG), debt-to-equity (DE), and return on equity (ROE).
Each has specific utility, PEG reflects the stocks valuation in respect to the growth prospects, Debt to equity renders info on the financial leverage. Return on Earning relates to profitability and efficiency of the company.
Based on the above statements, if you begin to visualise those parameters you can find the best three stocks in the swing markets.
They are
1. Bharat Electronics Ltd:
You may have heard about the supply of defence products that includes electronics systems, yes, Bharat Electronics Ltd, is a company that produces weaponry, radar, and fire control systems and if you want to place it in the best stock performers list, then you must view the stock information.
They are PEG ratio (7.59%), quarterly net profit increase (19.27%), quarterly increase of EBITDA is 15.63%, Debt-to-equity ratio (0.38%), and Industry average (12.52%).
2. SBI Life Insurance Company Limited:
The company offers a bunch of life insurance products/healthcare products for varied price and tenure. It covers all cross sections of society, such as senior citizens (retirement planner), Children (education planner), Employees/Business Communities (Taxation Planner).
You must view the company’s financial parameters that provide status of the company, and they are PEG (4.33%), Quarter Profit increase (15.58%), Quarterly increase (EBITDA) (13.30%), Year on Year increase since 5 years is 237.62%, and the industry average (78.74%).
3. Siemens Ltd:
Siemens Limited is a manufacturer of heavy machinery in the field of electricity. They are electric motors, generators, electricity distribution, control apparatus, transformers, traffic-control equipment, etc.
To make it to third position in the stocks rally, you must find the financial status of the company. They are PEG (2.03%), Quarter net profit (38.76%), Year-on-year (EBITDA increases by 35.03%), Debt to equity ratio (0.01%), industry average (127.01%).