7. Screening & Watchlists

You can’t trade what you don’t see. Screening = systematically narrowing the universe of 5,000+ stocks to the 5–10 worth your attention today.

The funnel

Universe (5,000 stocks)
       ↓ liquidity filter
Tradeable (~500 stocks)
       ↓ regime filter (above 200 SMA, etc.)
In play (~150)
       ↓ setup scan (today's pattern)
Candidates (5–15)
       ↓ manual chart review
Watchlist (3–5)
       ↓ entry trigger fires
Trade

Each stage cuts the list by 5–10×. By the end, you’re staring at a handful of charts, not thousands.

Liquidity filter (run once a month)

Minimum criteria to even consider a stock:

• Avg daily volume ≥ ₹10 crore (₹1 crore for very small accounts).
• Avg daily delivery volume > 30% (filters out pure operator stocks).
• In F&O list if you trade derivatives (~200 stocks).
• Listed > 1 year (avoid IPO chaos).

Result: a curated “Tradeable Universe” of 200–500 stocks. Save it as a watchlist.

Regime filter (daily)

Keep only stocks that match the broad market regime:

Market regime	Filter
Bullish	Stock close > 200 SMA, > 50 SMA, RS > 1
Bearish	Stock close < 200 SMA, < 50 SMA, RS < 1
Neutral	Filter to range-bound names, RS near 1

This is where most retail goes wrong — they trade longs when their universe is broadly below the 200 SMA. Macro alignment matters.

Setup scans

Now apply your specific setup filter. Examples:

A. 52-week-high breakout

Close = 52-week High
AND Volume > 1.5 × Avg Volume(20)
AND Close > Open (green candle)

B. Bollinger squeeze release

BBWidth(20) at 6-month low (squeeze formed in last 5 days)
AND Today close > Bollinger Upper(20)
AND RVOL > 2

C. RSI oversold in uptrend (mean reversion)

Close > 200 SMA
AND RSI(14) < 30
AND Today is a green candle (reversal)

D. Pullback to 20 EMA

Close > 50 EMA > 200 EMA
AND Low touched 20 EMA today
AND Bullish reversal candle (hammer / engulfing)

E. Momentum / IBD-style RS Top

Stock RS rating > 80 (top 20% performers vs index)
AND Earnings growth > 25% YoY
AND Within 15% of 52-week High

Tools for screening (India)

Tool	Strength
Chartink	Free, fast, technical scans. Custom syntax.
Screener.in	Best for fundamentals (EPS, ROCE, debt, growth).
Trendlyne	Combined technical + fundamental, scoring system.
TradingView Screener	Global, customizable, integrates with charts.
NSE official	Bhavcopy, FII/DII data, raw data downloads.
Sensibull	Options scans (high IV, OI buildup, etc.).

For traders who code: scrape NSE Bhavcopy daily into SQLite/Postgres → run custom Python screens. Total control, zero subscription cost.

Relative Strength (RS)

$\text{RS}_{stock} = \frac{\text{Stock return over N days}}{\text{Index return over N days}}$

• RS > 1 → outperforming the market.
• Trade longs in top RS stocks (institutions buy strength).
• Trade shorts in bottom RS stocks (weakness persists).
• IBD-style RS Rating ranks stocks 1–99 vs the universe.

“Buy strength, sell weakness” is the single most profitable mantra in trend-following.

Sector rotation

Money rotates between sectors over the cycle:

Early bull:  Financials, Real Estate, Auto, Consumer Durables
Mid bull:    Industrials, Capital Goods, Materials
Late bull:   Energy, Commodities
Bear:        Defensives — FMCG, Pharma, Utilities

Daily check: which sector indices (Nifty Bank, Nifty IT, Nifty Auto, Nifty Pharma, etc.) are leading in 1-week and 1-month performance? Trade the leaders, avoid the laggards.

Watchlist hygiene

Your watchlist is a living document, not a hoarding spot.

Rules:

• Max 15 stocks at any time. More than that and you can’t track them.
• Tier them: A-tier (ready to trade today), B-tier (watching for setup), C-tier (long-term radar).
• Rotate weekly. If a stock hasn’t given a setup in 2 weeks, demote it.
• Note why each stock is on the list (specific setup, level, catalyst).

Pre-market routine (15 minutes, daily)

A repeatable morning ritual:

1. Check global markets — US closed up/down? Asian markets now? SGX Nifty?
2. Overnight news — any earnings, RBI/Fed news, geopolitical events.
3. FII/DII data from yesterday — net buy/sell.
4. Update your A-tier watchlist — note key levels, set alerts.
5. Decide max trades for the day (typically 1–3).
6. Walk away from the screen until 09:30 (skip the open noise).

This single discipline alone separates pros from “phone-trader” amateurs.

Building automated alerts

Once your watchlist is set, you don’t need to stare. Use TradingView / Chartink alerts:

• Price crosses key level
• Volume spike (RVOL > 2)
• Indicator condition (RSI < 30)
• Pattern formation

Get notified → walk over → make a decision. Saves hours per day.