How to Use a Nifty Screener to Identify High-Potential Stocks
The two substantial stock exchange units of India are NSE and BSE. The Nifty 50 index belongs to the largest exchange unit, NSE. It comprises fifty influential shares from multiple industrial sections. Amongst all, financial services account for the most weightage of the index, around 35.26%.
Additionally, it has been exerting its impeccable impact on the Indian economy since 1990. Recent data shows that its closing figure is 24,141.95 as of 10 July 2024. Hence, it becomes imperative for investors to screen the best NIFTY shares to generate maximum profit.
But what is the most efficient method? Choose a to educate yourself about the stocks and get other fundamental insights. Follow the guide below to learn how to identify the best stocks with the help of this tool. Scroll down for more information.
Best Ways To Use A Nifty Screener For Desirable Outcomes
Tools and technologies have always helped us achieve more accuracy in our activities, and the nifty is the best example. This tool has helped beginners and experienced professionals minimise loss and maximise profits. Check a few ways you can adapt to identify potential nifty stocks.
● Exclude The Unwanted
Begin with decluttering your home screen. Set the exclusion criteria for the type of stocks you are not interested in. For some, it might be penny stocks for other large-cap stocks. Feed the filter according to your strategy. To avoid losses during market volatility, you can avoid high-beta stocks. The higher the beta quotient, the higher the loss incurred. Hence, setting it to below 1.5 is the best.
● Considering The Metrics
There are two major metrics net profit margin and return on equity. You set the former to high and the latter to very positive for scanning through the best stocks. The valuation of these will give profound insights into the company’s market condition and financial health. Additionally, there is a third parameter as well growth potential. Meticulously study the company background to comprehend its future profitability.
● Avoid Over-Optimisation
While filtering the parameters several times, we tend to tailor the screening to perfection. This often leads to over-optimisation, which is highly unadvised by experts. This occurrence may not be favourable since the model cannot adapt to new market trends. Hence, it might lead you to miss out on profitable stocks. Hence, never prevent your screening model from developing with time.
● Technical and Fundamental Analysis
While choosing a stock, ensure you have studied the technical aspects, such as price-volume trends, historical data, sectoral trends, etc. On the other hand, you must also consider the fundamental facets like earning per share, P/E ratio, Debt/Equity ratio, return on equity ratio, etc. These two combined will give accurate information on the market condition and aid you in detecting potential stocks.
● Maintain A Balance
Your nifty share screener must showcase a harmonious blend of large/mid-cap and low-index shares. Avoid only featuring robust stocks. This will help you maximise profits during the breakouts of those stocks. For instance, if a particular bank is not performing well but has a positive annual result, the stock share can rise dramatically. However, this will not be possible with only high-index stocks featured. However, carefully investigate the market potential before including it in your portfolio.
● Track and Monitor Performance
Lastly, fluctuations are the unwavering reality of the stock market. Hence, you must monitor their performance at regular intervals. This will keep you updated with the latest trends and allow you to make necessary alterations beforehand. Without proper tracking, it is challenging to invest profitably.
In Conclusion
The nifty constitutes an appreciable section of the NSE; hence, investing in Nifty stocks is profitable. Additionally, a screener renders more convenience, which helps you decide your investments more accurately. You can opt for Motilal Oswal’s Research 360, as this is considered one of the best nifty screeners for Indian stocks for its multiple features that offer various customisation options.