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.

The market has been making lower highs and lower lows since October last year. In the meantime, we have identified a stock that is now making new highs as we speak! Now would you call that relative strength?

Of course, we would! In a market where most stocks are correcting, there's got to be a lot of inherent strength for a stock to be making new highs!

Timken India Ltd. is the stock that's making new highs on both absolute and relative terms. The price broke out above 2,605 and has continued to follow through.

Currently trading strongly above the breakout level, the price is headed to its next resistance towards 3,820. As can be seen from the chart below, the stock has been moving higher consistently with a few breaks in between. When you zoom out, one can see the secular trend that has been in place since the market recovery in 2009.

We are bullish above the risk management level of 2,605 with a target close to 3,820.

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, ensuring that we’re not missing the names that are experiencing the most substantial moves.

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

Allstarcharts Team