The price of an asset provides essential insights into market sentiment and trend strength. By closely analyzing price movements alongside other technical indicators, you can predict future momentum and make informed trading decisions.

Our price stock screener enables you to swiftly screen stocks that have experienced significant fluctuations, reached recent highs and lows, or outperformed or underperformed market indices. With this tool, you can enhance your chances of selecting the right stocks for trading while minimizing the risk of entering positions at inopportune times.

A price stock screener is an essential tool for investors and traders, enabling them to screen stocks based on specific price-related criteria. The primary purpose of this tool is to refine the selection process, helping users identify potential investment opportunities by narrowing down available stocks according to targeted price considerations.

Research 360 by Motilal Oswal offers a comprehensive price stock screener in India, allowing you to filter stocks using daily, weekly, monthly, and yearly price metrics. This tool includes various screeners, such as those for stocks opening at high or low prices, tracking highs and lows, and identifying stocks that are outperforming or underperforming the Nifty 50 and sectoral indices. Additionally, you can monitor stocks with the highest falls and most significant recoveries, empowering you to make informed trading decisions.

Determining the price trend for an asset can give you key insights into how the movements are likely to be. For instance, an asset that is clearly in an uptrend is likely to continue the trend unless there are signs and indications of a potential reversal.

The calculation of a price trend involves analysing the historical price data of an asset to identify the general direction in which its price is moving over time. There are many methods and techniques that are used to identify price trends. Here’s a quick overview of one of the most popular methods.

Price Volume Trend

Price volume trend (PVT) is an indicator that helps you determine the relationship between an asset’s price movement and its corresponding trading volume. It indicates the strength and sustainability of a price trend. To calculate the PVT, all you need to do is use the following formula.

PVT = {[(Current Closing Price - Previous Day’s Closing Price) ÷ Previous Day’s Closing price] * Volume} + Previous Day’s PVT

Whether you’re a trader or an investor, knowing how to interpret the price trend of an asset is crucial since the success of your trades depends on you getting the trend right. Here’s how you interpret price volume trends.

Price and PVT Increases

If an asset’s price and its price volume trend increase simultaneously, it acts as a bullish trend confirmation. Since the price is expected to continue its bullish momentum, you can use this opportunity to enter into a long position in the asset.

Price and PVT Decreases

If an asset’s price and its price volume trend decrease simultaneously, it acts as a bearish trend confirmation. Since the price is expected to continue its bearish momentum, you can use this opportunity to sell the asset or take up a short position.

Price Decreases and PVT Increases

If an asset’s price decreases, but its price volume trend increases, it suggests a bullish divergence. A bullish divergence may indicate a potential upcoming upward price reversal. You can use this opportunity to enter into a long position in the asset. However, it is advisable to first confirm the bullish reversal before taking up a position to reduce the risk of the market working against you.

Price Increases and PVT Decreases

If an asset’s price increases, but its price volume trend decreases, it suggests a bearish divergence. A bearish divergence may indicate a potential upcoming downward price reversal. You can use this opportunity to sell the asset or take up a short position. However, remember to first confirm the bearish reversal before taking up a position to reduce the risk of losses.

Volume and PVT Increases

If the trading volume increases along with the price volume trend, it suggests strong pressure from the buyers, meaning that the price is likely to go upward. You can use this opportunity to purchase the asset or go long.

Volume and PVT Decreases

If the trading volume decreases along with the price volume trend, it suggests strong pressure from the sellers, meaning that the price is likely to go downward. You can use this opportunity to sell the asset or take up a short position.

Once you’ve interpreted the price trend of an asset, you can use the insights you gained to employ appropriate trading strategies. Some of the most popular strategies you can use have been outlined below.

Trend-Following Strategy

As the name implies, the trend-following strategy involves taking up a position matching the same direction as the current trend. For instance, if the current trend is bullish, you can take up a long position. On the other hand, if the current trend is bearish, you can take up a short position. This is one of the simplest strategies that you can use.

Breakout Trading Strategy

The breakout trading strategy involves capitalising on the price movements of an asset after it breaks out of a support or resistance level. A support level is a level below which an asset’s price doesn’t fall, whereas a resistance level is a level below which an asset’s price doesn’t rise.

However, asset prices may break out of their support or resistance levels in the face of intense selling or buying pressure. You can use such opportunities to enter into a corresponding position. For instance, if the asset’s price breaks out below its support level due to intense selling pressure, you can enter into a short position to capitalise on the bearish price trend. On the other hand, if the asset’s price breaks out above its resistance level due to strong buying pressure, you may enter into a long position to capitalise on the bullish price trend.

Support and Resistance Trading Strategy

Support and resistance trading strategy involves entering into positions when the asset’s price nears a support or resistance level. For instance, if the asset’s price approaches a strong support level, it may test it briefly before bouncing back up. In such a case, you can enter into a long position soon after the price bounces back up.

With thousands of stocks listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), how do you pick the right stock to invest in? Seasoned investors themselves find it challenging at times; and for beginners, the task may seem downright daunting even. Here’s where an expert stock screener can help.

An expert stock screener is a unique tool that helps you pick stocks that are well suited for your investment objectives, risk profile and investment horizon. The tool uses the knowledge of stock market experts to suggest stocks based on certain set variables like revenue, net profit, Benjamin Graham Value and High Piotroski Score, among others.

An expert stock screener is a tool that filters stocks based on certain predetermined criteria, drawn from the knowledge, experience and analysis of stock market experts. Research 360 by Motilal Oswal currently offers eight multi-query expert stock screeners that help you find stocks matching the criteria you choose.

• Benjamin Graham Value
• High Piotroski Score
• High ROCE, Low PE
• Increasing Revenue Every Quarter for the Past 8 Quarters
• Increasing Revenue Every Quarter for the Past 4 Quarters
• Increasing Revenue Every Quarter for the Past 3 Quarters
• Increasing Revenue Every Quarter for the Past 2 Quarters
• Net Profit Increasing 500%

When you select an expert stock screener, a list of stocks that match your chosen criteria is displayed in descending order by default. You can further filter the stocks based on the sector or index to narrow down the results.

Each expert stock screener in Research 360 displays stocks matching certain criteria. Knowing what these stock screeners are and how to read them is essential to make well-informed investment decisions. Here’s a quick overview of the various expert stock screeners available in Research 360 and a brief explanation of the criteria that they use to filter stocks.

Benjamin Graham Value

This expert stock screener displays stocks that have a market capitalisation of more than Rs. 500 crores while possessing a Graham Ratio of more than 1, which is considered a healthy ratio.

High Piotroski Score

This screener displays stocks that have high Piotroski scores ranging from 5 to 9. The stocks are by default organised in the descending order of their scores. The higher the Piotroski score, the more fundamentally strong the stock is.

High ROCE, Low PE

This expert stock screener displays stocks that have a high Return on Capital Employed (ROCE) while still having reasonably lower valuations.

Increasing Revenue Every Quarter for the Past 8 Quarters

This screener displays stocks whose revenue has been growing consistently quarter-over-quarter (QoQ) for the past 8 quarters.

Increasing Revenue Every Quarter for the Past 4 Quarters

This expert stock screener displays stocks whose revenue has been growing consistently quarter-over-quarter (QoQ) for the past 4 quarters.

Increasing Revenue Every Quarter for the Past 3 Quarters

This screener displays stocks whose revenue has been growing consistently quarter-over-quarter (QoQ) for the past 3 quarters.

Increasing Revenue Every Quarter for the Past 2 Quarters

This stock screener displays stocks whose revenue has been growing consistently quarter-over-quarter (QoQ) for the past 2 quarters.

Net Profit Increasing 500%

This expert stock screener displays stocks whose net profit has grown by 500% or more year-over-year (YoY) and quarter-over-quarter (QoQ).

Some of the most crucial metrics that traders and investors use to gain insights into market activity and investor behaviour for a stock are trading volume, delivery percentages and delivery quantity. Increased trading volumes generally indicate increased interest, which may lead to potential opportunities. Increased delivery percentages and quantities, meanwhile, help determine whether the interest is merely speculative or genuine.

High-volume stock screeners and high-delivery stock screeners, such as the ones offered by Research 360, leverage these essential metrics, allowing you to filter stocks based on volume and delivery criteria. With the help of these screeners, you can easily identify stocks that align with your trading and investment strategies.

A volume and delivery stock screener is a tool designed exclusively to help you filter stocks based on their trading volume, delivery percentage and delivery quantity. Both volume and delivery percentage are crucial metrics that investors often use to gauge the liquidity and strength of price movements in a particular stock.

Using the delivery and volume screener, you can quickly identify stocks that exhibit unusually high trading volume or delivery percentages which may suggest potential major price movements in the future. High-volume stock screeners and high-delivery stock screeners also let you gauge the market sentiment and make well-informed trading and investment decisions.

Research 360 offers one of the best stock screeners in India that can quickly filter stocks based on their volume, delivery quantity and delivery percentages. Here’s how you can use the delivery and volume screener of Research 360.

Step 1: In the left-hand side of the ‘Volume and Delivery’ section of the screeners in Research 360, you will find two drop downs titled ‘Delivery’ and ‘Volume’.

Step 2: Clicking on the ‘Delivery’ drop-down will give you access to the high delivery stock screener. Under the drop-down, you will find three options - High Delivery Percentage, Higher Delivery Quantity and Higher Delivery Quantity and Percentage.

Step 3: Clicking on ‘High Delivery Percentage’ will give you details of the stocks with the highest delivery percentage. ‘Higher Delivery Quantity’ provides information on stocks with the highest quantity of shares delivered. Finally, ‘Higher Delivery Quantity and Percentage’ shows stocks with both the highest delivery percentages and the highest quantity of shares delivered.

Step 4: Clicking on the ‘Volume’ drop-down will give you access to the high-volume stock screener. Under the drop-down, you will find three options - Higher Trade Quantity, High Volume, Top Gainer and High Volume, Top Loser.

Step 5: Clicking on ‘Higher Trade Quantity’ will give you details of the stocks with the highest trading volume. ‘High Volume, Top Gainer’ provides information on stocks whose prices have increased the most along with the highest trading volume. Finally, ‘High Volume, Top Loser’ shows stocks whose prices have decreased the most along with the highest trading volume.

If you’re interested in investing in a stock for the long term, you need to pay close attention to its fundamental factors. The stock’s fundamental strength and future growth potential play a huge role in its long-term performance. By prioritising fundamental analysis, you can effectively steer clear of market noise and short-term fluctuations, which is essential for long-term investing.

A fundamental stock screener can help you identify stocks with good financial metrics and a long performance track record. The tool makes fundamental analysis of stocks much easier and helps you make well-informed investment decisions much quicker than if you were to manually analyse their financial performance.

A fundamental stock screener is a powerful tool that enables you to shortlist stocks based on key financial metrics like revenue, net profit, Price-to-Earnings (PE) ratio, dividend yield, operating cash flow, debt-to-equity ratio, Return on Equity (ROE) and Return on Capital Employed (ROCE), among others.

A fundamental screener sifts through thousands of stocks, evaluating and filtering them to identify the ones that match your chosen criteria. Once the list of stocks matching the predefined criteria is generated, the tool even allows you to compare multiple stocks side-by-side, helping you choose promising and fundamentally strong stocks with good wealth creation potential.

A screener for fundamental analysis like the one offered by Research 360 by Motilal Oswal enables you to filter stocks based on financial and other fundamental metrics. Some of the key metrics that the tool indicates are as follows.

Step 1: Select the Criteria

For any fundamental stock screener in India to provide accurate results, you need to first select the right criteria. Most screeners have predefined criteria that you can choose such as PE ratio, dividend yield, revenue and net profit.

Step 2: Review the Results

Once you’ve chosen your preferred criteria, the stock screener will instantly produce a list of companies that match them. Review the results thoroughly and compare the stocks with one another. This should help you identify companies that have performed consistently.

Step 3: Analyse Individually

Upon reviewing the results and shortlisting stocks even further, you need to set out to analyse each company individually. To get more context and insights, make sure to also look at other key fundamental and financial metrics.

Step 4: Use Your Findings

Once all of the stocks in the final list have been reviewed and analysed individually, you should ideally get clarity on which stock you need to invest in. If multiple stocks match your criteria and preferences, consider allocating your capital across these companies.

A screener for fundamental analysis like the one offered by Research 360 by Motilal Oswal enables you to filter stocks based on financial and other fundamental metrics. Some of the key metrics that the tool indicates are as follows.

Company Shareholding

A company’s shareholding pattern can provide you with insights into how the stock is likely to perform in the future. For instance, if the promoters, foreign institutional investors or mutual funds are selling their stake in a company, it may indicate potential trouble within the company. In such cases, it is advisable to stay away from investing in the stock.

Promoter Pledge

Promoters of a company may sometimes pledge their shares as collateral to obtain loans. However, it is usually done as a last resort when the company has exhausted all other forms of financing. If a fundamental screener indicates an increase in the promoters’ pledge for a stock, it may be indicative of financial troubles. Meanwhile, a decrease in the pledge may be a sign of a positive financial situation.

Return On Equity (ROE)

Return on Equity is a financial metric that indicates just how efficient a company is at generating profits using its shareholders’ funds. A high ROE is often preferred by investors since it suggests that the company is highly efficient at generating profits with the funds invested by its shareholders. Stocks with high ROE or a consistently increasing ROE should often be preferred.

Return On Capital Employed (ROCE)

Another major metric that a screener for fundamental analysis indicates is the Return on Capital Employed. It is a financial metric that indicates just how efficient a company is at generating profits using both debt and equity capital. A high ROCE is often preferred since it suggests that the company is highly efficient at generating profits with the capital available to it. Stocks with a high ROCE or a consistently increasing ROCE may be good long-term investment options.

Revenue

Revenue is the income generated by a company during a specific period from its primary operations. It represents the money earned before deducting expenses and taxes. Investors often prefer companies with a high revenue. That said, merely having a high revenue may not always be enough. The revenues should either be steady or increase with every quarter or year.

Net Profit

Net profit, also known as profit after tax or PAT, is the amount of money a company retains after deducting all possible expenses, depreciation, interest payments and taxes from its total revenue. The net profit is the earnings that belong to shareholders and provides you with a clearer picture of a company’s true financial state.

Earnings Per Share

Earnings Per Share or EPS is a financial metric that indicates the amount of profit belonging to each share of the company. It is arrived at by dividing the net income of the company by the total number of outstanding shares. The higher the EPS, the better the stock is for long-term investment purposes.

Debt Levels

Fundamental stock screeners also indicate the debt levels of a company. A company with high debt compared to its equity is said to be highly leveraged and may not be ideal for long-term investments. The high debt levels increase the interest payments and have the potential to bring down the profits.

Cash Flow From Operations

Cash flow from operations is another crucial financial metric that most fundamental stock screeners in India indicate. It provides insights into a company’s ability to generate cash from its daily operations. A company with a high inflow of cash from operations is viewed favourably compared to a company with low cash flows.

Price-to-Earnings Ratio

Price-to-Earnings (PE) Ratio is a metric that indicates just how much investors need to pay for each rupee of profit generated by the company. It is calculated by dividing the current market price of a stock by its EPS. A stock with a very high PE ratio is often considered to be overvalued and expensive, whereas a low PE ratio may indicate that the stock is undervalued.

Research 360 by Motilal Oswal, a comprehensive stock screener in India, offers single and multi-query fundamental screeners to help you identify financially strong companies. Here are some examples.

Consistently Increasing Revenue and Net Profit Screeners

These fundamental screeners provide you with a list of companies whose revenue and net profit have been consistently increasing quarter-over-quarter (QoQ) and year-over-year (YoY).

Promoters with Zero Pledge Screener

This screener displays the list of companies where the promoters have not pledged any of their shares as collateral to obtain loans.

Positive Turnaround Screener

The positive turnaround fundamental screener shows you a list of stocks that have made profits in the current year after recording a loss in the previous year.

Debt-Free Companies Screener

This stock screener gives you a list of companies that have not taken on any debt and are fully funded through equity and their own reserves.

High and Low Leverage Screeners

These fundamental screeners display stocks with high debt levels compared to equity and stocks with low debt levels compared to their equity.

Price to Earnings Ratio Screeners

Price to Earnings Ratio screeners display stocks with very high, high, moderate and low PE ratios.

High Dividend Yield Screener

This screener for fundamental analysis displays stocks that have high dividend yields. A company that distributes a major portion of its profits to its shareholders will have high yields.

Traders looking to generate returns from short-term price movements in assets usually prefer analysing and examining candlestick patterns to predict future trends and momentum. However, going through candlestick charts manually can take up a lot of time, which may lead to missed trading opportunities. Also, there’s a chance of misinterpreting candlestick patterns as well. Here’s where a candlestick pattern screener can help.

A candlestick screener is a tool that’s used to identify potential trading opportunities by analysing candlestick patterns. The screener can scan vast amounts of historical and real-time market data to identify specific candlestick formations, such as doji, bullish and bearish engulfing or hammer patterns.

With the help of this stock screener, you can shortlist stocks depending on the candlestick criteria you choose, allowing you to make informed decisions like when to buy or sell a stock.

A candlestick is essentially a visual representation of the price movement of an asset. It resembles a candle and has three distinct parts - a coloured rectangular body (candle), a thin upper line (upper shadow or upper wick) and a thin lower line (lower shadow or lower wick).

The candle represents the opening and closing prices of the asset, whereas the upper and lower wicks represent the highs and lows that the asset reached during the specified time frame. The colour of the candle can either be green or red depending on how the asset moved during the time frame. For instance, if the asset’s price at the end of the time frame is higher than what it was at the start, the candle will be green. On the other hand, if the asset’s price at the end of the time frame is lower than what it was at the start, the candle will be red.

Research 360 by Motilal Oswal offers a comprehensive candlestick stock screener in India. You can quickly identify stocks that have exhibited bullish or bearish candlestick patterns. To use the screener, all you need to do is select ‘CandleStick’ on the ‘Screeners’ section of the platform.

The candlestick patterns are categorised into two types - ‘Bullish’ and ‘Bearish’. Select the candlestick pattern from either of the two drop-down lists. The stock screener will instantly filter and display the list of stocks that have recently exhibited the chosen candlestick pattern.

There are more than 80 formally recognised candlestick patterns that traders around the world use. As a trader, you need to be able to identify the various patterns to accurately predict how the asset is likely to move. Here are some of the most popular and widely occurring patterns that you will often find.

Doji

The doji is one of the most important candlestick patterns. It is characterised by long upper and lower wicks and a very short body. In fact, many dojis resemble a cross due to their short bodies. A doji represents indecision or a pause in the trend. If the pattern appears during a bearish or bullish trend, it may signal a potential reversal.

Dragonfly Doji

A dragonfly doji is a variation of the standard doji. It is characterised by a long lower shadow and a short or non-existent upper shadow. The body of the candle is situated right at the top, making the pattern look like a ‘T’. The dragonfly doji usually appears during a bearish trend and may signal a potential trend reversal.

Gravestone Doji

The gravestone doji is the converse of a dragonfly doji and is characterised by a long upper shadow and a short or non-existent lower shadow. The body of the candle is situated right at the bottom, making the pattern resemble an inverted ‘T’. The gravestone doji generally appears during a bullish trend and may signal a potential trend reversal.

Hammer and Inverted Hammer

Another set of very popular patterns that you can find in a candlestick stock screener in India is the hammer and inverted hammer. The hammer looks very similar to a gravestone doji but with a thicker green body at the top of the candle. The pattern derives its name from its close resemblance to a hammer.

The inverted hammer, meanwhile, is essentially an inverted hammer pattern. Both the hammer and inverted hammer are bullish candlestick patterns that generally appear during a bearish trend, signalling a potential reversal.

Hanging Man and Shooting Star

The hanging man and shooting star are both very similar to the hammer and inverted hammer respectively. The hanging man has a red body at the top with a long lower wick, whereas the inverted hammer has a long upper wick and a red body at the bottom. Both of these patterns appear during a bullish trend and may indicate a future reversal.

White and Black Marubozu

The Marubozu is another very important pattern that most candlestick screeners have. It is characterised by a long body and non-existent upper or lower wicks. There are two variants of the pattern - white Marubozu or black Marubozu.

A white Marubozu is created when the price opens at the day’s low and increases throughout the session, ending at the day’s high. If a white Marubozu appears at the end of a bearish trend, there’s a high chance of the trend reversing.

A black Marubozu, meanwhile, is created when the price opens at the day’s high and decreases throughout the session, ending at the day’s low. If a black Marubozu appears at the end of a bullish trend, there’s a high chance of the trend reversing.

Bullish and Bearish Harami

The bullish Harami is a two-part candlestick pattern that’s characterised by a red candle with a long body followed by a green candle with a short body. The short green candle must be fully contained within the long red candle. If the bullish Harami appears during a bearish trend, the price movement may likely reverse.

The bearish Harami, meanwhile, is characterised by a green candle with a long body followed by a red candle with a short body. The short red candle must be fully contained within the long green candle. If the bearish Harami appears during a bullish trend, the price movement may likely reverse.

Bullish and Bearish Harami Cross

The Harami Cross is another two-part candlestick pattern and is very similar to the Harami. However, there’s a doji after the long candle instead of a short candle. The bullish Harami Cross is characterised by a long red candle followed by a doji. If the pattern appears during a bearish trend, it may signal a shift in the trend. The bearish Harami Cross is characterised by a long green candle followed by a doji. If the pattern appears during a bullish trend, it may signal a potential reversal.

Bullish and Bearish Engulfing Pattern

The engulfing pattern is a very important pattern you can find in a candlestick chart screener. The bullish engulfing pattern is characterised by a short red candle followed by a long green candle. The long green candle must completely cover or engulf the short red candle. If the pattern appears during a bearish trend, it may indicate a potential trend reversal.

The bearish engulfing pattern, on the other hand, is characterised by a short green candle followed by a long red candle. The long red candle must completely cover or engulf the short green candle. If the pattern appears during a bullish trend, it may indicate a potential trend reversal.

Piercing Line

The piercing line is a two-part candlestick pattern characterised by a long red candle followed by an equally long green candle. However, the closing price of the green candle must be 50% or above the red candle’s body. Furthermore, the opening price of the green candle must be below the closing price of the red candle. The piercing line pattern generally appears at the end of a bearish trend and may potentially signal a trend reversal.

Dark Cloud Cover

The dark cloud cover is an inverse of the piercing line. It consists of a long green candle followed by an equally long red candle. The closing price of the red candle must be near 50% of the green candle’s body. The pattern appears at the end of a bullish trend and signals a reversal.

Upside Tasuki Gap

The upside Tasuki Gap is a three-candlestick pattern you can find in a stock screener. It consists of a green candle, followed by another green candle and then by a red candle. Here, the second green candle has a gap-up opening compared to the first green candle. The red candle, meanwhile, must close below the opening of the second green candle. If the pattern appears during a bullish trend, it may signal a continuation of the momentum.

Morning Star

A sign of trend reversal, the morning star candlestick pattern usually appears at the end of a bearish trend. It consists of three candlesticks - a long red candle, a short red candle and a long green candle. The short red candle must have a gap-down opening and the long green candle must open near the close of the short red candle.

Three White Soldiers

Another very popular three-candlestick pattern, the three white soldiers consist of three green candles in a staggered upward formation. The close of each candle must be near or below 50% of the succeeding candle’s body. The appearance of the pattern during a bearish trend may indicate a potential reversal.

Identical Three Crows

The converse of the three white soldiers, the identical three crows consist of three red candles in a staggered downward formation. The close of each candle must be near or below 50% of the succeeding candle’s body. The appearance of the pattern during a bullish trend may indicate a reversal.

Bullish Kicking

The bullish kicking is a two-part candlestick pattern consisting of a red candle followed by a green candle. The green candle must open near or above the red candle’s opening price. The pattern represents reversals and usually appears during a bearish trend.

Abandoned Baby Bottom

The abandoned baby bottom is a three-part pattern consisting of a long red candle, a short red candle and a long green candle. The second short red candle must have a gap-down opening, whereas the long green candle must open above the closing price of the short red candle. If the pattern appears during a bearish downtrend, it may indicate a reversal.

Abandoned Baby Top

The abandoned baby top is a three-part pattern available in a few candlestick screeners. It consists of a long green candle, a short green candle and a long red candle. The second short green candle must have a gap-up opening, whereas the long red candle must open below the opening price of the short green candle. The pattern signifies trend reversal and appears during a bullish uptrend.

There isn't a single "most reliable" candlestick pattern, per se. The effectiveness and reliability of candlestick patterns depend on various factors like market conditions, volatility and time frame, among others.

That said, some candlestick patterns typically generate stronger signals than others, these include engulfing patterns, dojis, hammers and shooting stars. It is advisable to combine multiple candlestick patterns and technical analysis tools to get accurate predictions. Also, no candlestick pattern can guarantee success. Therefore, it is ideal to ensure proper risk management practices.

Although using candlestick stock screeners is a much faster and more efficient way to identify potential trading opportunities, as a trader, you need to know how to analyse candlestick patterns. Here’s a quick overview of the step-by-step process you need to follow.

Step 1: Set a Time Frame

The first step in candlestick pattern analysis is determining the time frame you wish to use. The time frame can be as short as a minute to as long as weeks and months. The patterns have different implications depending on the chosen time frame.

Step 2: Finalise Your Trading Strategy

Once you’ve decided on the time frame, the next step is to determine the trading strategy you’re going to use. Your strategy can either be scalping, which requires quick trade executions, or momentum trading, which is not as fast-paced.

Step 3: Identify Ongoing Trends

Once you’ve finalised the strategy, determine the current trend of the asset. The ongoing trend can influence the type of patterns that may appear.

Step 4: Look Out for Patterns

Keep a keen eye out for the various candlestick patterns. If the ongoing trend is bullish, look out for trend continuation and reversal patterns.

Step 5: Look for Confirmation

If you’ve spotted a pattern, try to confirm the trend reversal or continuation with other technical indicators. This will reduce the chances of the market moving against your position.

Step 6: Place Trades

Once you’ve gotten the confirmation, you can proceed to enter into your preferred position.

However, if you’re a trader looking for short-term opportunities, technical analysis is what you must focus on. Technical analysis involves analysing the historical price and trading volume of an asset to predict its future movements. Through technical analysis, you can unearth patterns, trends and potential reversal points that are not very apparent.

However, a major limitation of this method is that it consumes a lot of time since you need to look at and analyse multiple indicators. Here’s where tools like technical screeners can come in handy. They’re specially designed tools that allow you to instantly filter stocks based on predetermined technical criteria. It speeds up the technical analysis process significantly and helps you make informed trading decisions that are in line with your goals and risk profile.

A technical stock screener is a tool that allows you to shortlist stocks that meet the predefined technical criteria you choose. The primary goal of the screener is to help you identify potential trading and investment opportunities based on your preferred technical indicators and patterns.

Research 360 by Motilal Oswal offers a powerful technical stock screener in India. With the tool, you can filter stocks on the basis of more than 100 technical criteria across 10 different categories of indicators. From moving averages and relative strength index to MACD and Bollinger Bands, you can instantly get information on stocks that match your chosen technical indicator.

The way technical indicator screeners work is very simple. Here’s a quick step-by-step overview to help you understand them better.

Firstly, you need to select the technical criteria based on which you want the tool to filter stocks. For example, if you wish to know what stocks are in the overbought zone or oversold zone of the relative strength index (RSI), you can simply select the criteria pertaining to it. You can also choose multiple technical criteria across different segments as well.

The technical indicator screener will filter stocks based on your inputs. The more criteria you choose, the shorter and more refined the list of stocks is likely to be.

Once the stocks are displayed, you can sort through them and filter them further based on the index or sector.

Technical indicators can be categorised into different types such as trend-following indicators, momentum oscillators, volume indicators and volatility indicators, among others. Let's look at some of the most commonly used technical indicators.

Moving Averages

Moving averages are lagging technical indicators, meaning that they provide insights after the price movement happens. They help you identify trends over a specific time frame by smoothing out an asset’s price data. There are two different types of moving averages - Simple Moving Average (SMA) and Exponential Moving Average (EMA).

Simple Moving Average (SMA) calculates the average price of an asset over a set number of periods. Exponential Moving Average (EMA) also does the same but assigns more weightage to prices of recent periods. This makes the EMA more responsive compared to the SMA. An increasing moving average may indicate a bullish trend, whereas a decreasing moving average may indicate a bearish trend.

Moving Average Convergence and Divergence (MACD)

The Moving Average Convergence and Divergence is a trend-following technical indicator that helps establish a relationship between two moving averages of an asset. The indicator consists of two parts - an MACD line and the signal line.

The MACD line is the difference between a short-term EMA and a long-term EMA. The signal line, meanwhile, is a 9-day EMA of the MACD line. If the MACD line crosses above the signal line, it signals a potential bullish trend. On the other hand, if the MACD line crosses below the signal line, it indicates a potential bearish trend.

Bollinger Bands

Bollinger Bands are a volatility indicator that consists of three parts - a middle band and two outer bands. The middle band is a Simple Moving Average (SMA) for a certain specific time frame, say 20-day SMA. The two outer bands, meanwhile, are standard deviations of the middle band’s SMA.

The Bollinger Bands react to market volatility and automatically adjust themselves. For instance, the bands expand during periods of volatility and contract during low volatility. Apart from gaining insights into market volatility, you can also identify overbought and oversold conditions. For example, if an asset’s price touches or crosses the upper Bollinger Band, it is said to be overbought. On the other hand, if the price touches or crosses the lower band, the asset is said to be oversold.

Relative Strength Index (RSI)

The Relative Strength Index or RSI is a momentum oscillator that can measure the speed and quantum of price movements in an asset. The technical indicator moves between a scale of 0 to 100. If the RSI of an asset is above 70, it is said to be overbought, increasing the chances of a trend reversal or market correction. Conversely, if the RSI is below 30, the asset is said to be oversold, which may also trigger a reversal or correction.

Stochastic Oscillator

Another momentum indicator, the Stochastic Oscillator measures the location of an asset’s closing price relative to its price range over a specific period. This technical indicator also moves between a scale of 0 to 100. If the oscillator moves above 80, the asset is said to be overbought and if it moves below 20, the asset is said to be oversold. The Stochastic Oscillator can be very useful to determine potential entry and exit points.

Average Directional Movement

The Average Directional Movement Index or ADX is a technical indicator that’s used to measure the strength of a trend irrespective of its direction. The ADX is represented as a line on a chart that ranges from 0 to 100. If the ADX is rising, it may indicate a strengthening trend, whereas a falling ADX indicates a weakening trend or a trend that’s moving sideways. The Average Directional Movement Index on its own may not provide the insights necessary to make trading decisions. Therefore, it is advisable to use it in conjunction with other indicators.

Williams %R

The Williams Percent Range or Williams %R is a technical indicator that identifies overbought or oversold conditions. It moves on a scale of -100 to 0, with readings below -80 being considered as oversold and readings above -20 being considered as overbought. With the Williams %R, you can identify potential reversal points.

Money Flow Index

The Money Flow Index or MFI is a technical indicator that measures the strength and direction of the flow of money in an asset for a specified time frame. The momentum oscillator moves on a scale of 0 to 100 and uses both price and volume data to identify overbought and oversold conditions. High MFIs are considered to be overbought regions, whereas low MFIs are considered to be oversold regions.

Research 360 by Motilal Oswal offers a comprehensive technical stock screener in India. Here’s a quick look at some of the examples of the screeners that you can find on the platform.

• 1. Simple Moving Average
• 2. Relative Strength Index
• 3. Money Flow Index
• 4. William %R
• 5. Exponential Moving Average
• 6. MACD
• 7. Average Directional Movement
• 8. Bollinger
• 9. Stochastic
• 10. Super Trend

Each category of technical indicators mentioned above features more in-depth screeners to help you filter stocks more effectively. For example, under the Relative Strength Index category, you can find screeners like RSI Overbought Zone and RSI Oversold Zone, among others. Meanwhile, under MACD, you can find screeners like MACD CrossOver Signal Line and MACD Moving Above Zero.

Each category of technical indicators mentioned above features more in-depth screeners to help you filter stocks more effectively. For example, under the Relative Strength Index category, you can find screeners like RSI Overbought Zone and RSI Oversold Zone, among others. Meanwhile, under MACD, you can find screeners like MACD CrossOver Signal Line and MACD Moving Above Zero.

You can select the screener depending on your preferred indicator. For example, if you wish to identify oversold stocks, you can choose screeners like RSI Oversold Zone and Price CrossOver Lower Bollinger Band. This should give you the list of stocks that have been oversold and are likely to bounce back up in the future.