Ah, the interplay of sectors and intraday trading, a topic often overlooked but crucial for any
trader who wants to get the most out of the Indian market. Let’s break it down:
Why Sectoral Trends Matter?
● Momentum: Sectors trending up usually have stocks that are bullish, and vice versa.
● Risk Diversification: Focusing on multiple sectors can reduce your risk.
● Macro Factors: Sectors often respond to macroeconomic indicators, making them
predictable to some extent.
Steps to Analyze Sectoral Trends:
Step 1: Identify Hot and Cold Sectors
Criteria: Sectors with consistent upward or downward movement for the last few
days/weeks.
Tools: Use Alice Blue’s platform to get sectoral indices or a heat map view.
Example: If the Pharma sector is booming, stocks within this sector are worth
investigating.
Step 2: Correlate with Broader Indices
Criteria: How does the sector perform compared to Nifty or Sensex?
Tools: Charts that overlay sectoral indices with broader indices.
Example: If Nifty is up by 1% and the IT sector is up by 3%, it’s a strong sector.
Step 3: Individual Stock Analysis
Criteria: Stocks that outperform their sectoral index.
Tools: Stock screener tools on Alice Blue.
Example: If the Banking sector index is up by 2%, look for stocks that are up by more
than 2%.
A Mini Case Study:Let’s say the Energy Sector is trending up. Three stocks in this sector are Stock X, Stock Y, and
Stock Z.
● Stock X would be a good candidate for intraday trading as it outperforms the sector and
has high trading volume.
Tips and Tricks:
● Follow the News: Earnings, mergers, and policy changes can affect sectors.
● Check Intraday Liquidity: A stock should have enough volume for you to enter and exit
positions.
● Use Technical Indicators: Alice Blue offers a myriad of technical indicators like MACD, RSI,
etc., to confirm your choices.
Sectoral trends can be your best friend in identifying stocks that are likely to give favorable
intraday returns. Platforms like Alice Blue provide excellent tools to assess both sectors and
individual stocks. So keep an eye on those sectors, and may your trades be ever in your favor.
Happy Trading!