The All Star Momentum Scan

While we go through our lists of sectors and stocks on a weekly basis, we thought of launching a product that would highlight the strongest performers in our universe. These are the ones that are primed for an explosive move.

Just like The Outperformers scan, this is a list of stocks belonging to the sectors that display relative strength in the market at any given point in time. Since sector rotation is the lifeblood of a bull market, we will be ahead of the curve before the gears keep shifting.

Here is the list of The All Star Momentum Scan that we sorted by way of relative strength. These stocks have been selected on the basis of inter-and intra- sectoral performances. So while these belong to the sectors that are outperforming the market, these stocks are also outperforming their peers within the same sector.

Click on the chart to enlarge the view.

In order to identify the high momentum stocks, we scanned the Nifty 500 index on the basis of relative strength. Then we sorted them on the basis of the distance between the current market price and their respective all-time highs.

This is a bottom-up scan that keeps us on our toes. Any new development in price and sector rotation reflects in this list. Sometimes with so much going on one may overlook an interesting story developing in a specific sector. This scan helps us remain up-to-date with all that’s happening in the market.

To make sure that we’re getting the best out of the scan we look for outperforming stocks within the outperforming sectors!

Quite often, we see the same names coming up in different scans, but that is something we love to see! If different processes and scans are directing us towards the same name, that just means we should not turn away from the inherent strength in that particular stock.

We highlighted in our weekly charts the strength that we were observing in the Auto sector. Keeping in mind the current market trend, the trade ideas are extremely specific. There are only a handful of stocks with a clear direction, and we're just going to focus on those names until then.

Today we're looking at a name from the Auto sector. Schaeffler India has had quite the move since the 2020 correction.

We just got a breakout in price with a strong move coming through. The price has moved past its 261.8% Fibonacci retracement with a strong bullish candlestick. This, along with strong momentum is definitely something we like to see on the chart.

So while Auto is performing well among a couple of other sectors, the relative strength coming through is a big positive as well. Schaeffler is making new absolute highs as well as relative highs.

We are bullish above the risk management level of 2,155 with a target close to 3,115.

This bottom-up scan helps us winnow down to the strongest stocks among as many as 500 scrip codes! So while we continue with our top-down analysis for a broader market perspective, an additional layer of the bottom-up scan adds to our process making sure that we’re not missing the names that are experiencing the strongest moves.

Thanks for reading and please let us know if you have any questions.

Allstarcharts Team