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The price of an asset provides essential insights into market sentiment and trend strength. By closely analyzing price movements alongside other technical indicators, you can predict future momentum and make informed trading decisions.
Our price stock screener enables you to swiftly screen stocks that have experienced significant fluctuations, reached recent highs and lows, or outperformed or underperformed market indices. With this tool, you can enhance your chances of selecting the right stocks for trading while minimizing the risk of entering positions at inopportune times.
A price stock screener is an essential tool for investors and traders, enabling them to screen stocks based on specific price-related criteria. The primary purpose of this tool is to refine the selection process, helping users identify potential investment opportunities by narrowing down available stocks according to targeted price considerations.
Research 360 by Motilal Oswal offers a comprehensive price stock screener in India, allowing you to filter stocks using daily, weekly, monthly, and yearly price metrics. This tool includes various screeners, such as those for stocks opening at high or low prices, tracking highs and lows, and identifying stocks that are outperforming or underperforming the Nifty 50 and sectoral indices. Additionally, you can monitor stocks with the highest falls and most significant recoveries, empowering you to make informed trading decisions.
Determining the price trend for an asset can give you key insights into how the movements are likely to be. For instance, an asset that is clearly in an uptrend is likely to continue the trend unless there are signs and indications of a potential reversal.
The calculation of a price trend involves analysing the historical price data of an asset to identify the general direction in which its price is moving over time. There are many methods and techniques that are used to identify price trends. Here’s a quick overview of one of the most popular methods.
Price Volume Trend
Price volume trend (PVT) is an indicator that helps you determine the relationship between an asset’s price movement and its corresponding trading volume. It indicates the strength and sustainability of a price trend. To calculate the PVT, all you need to do is use the following formula.
PVT = {[(Current Closing Price - Previous Day’s Closing Price) ÷ Previous Day’s Closing price] * Volume} + Previous Day’s PVT
Whether you’re a trader or an investor, knowing how to interpret the price trend of an asset is crucial since the success of your trades depends on you getting the trend right. Here’s how you interpret price volume trends.
Price and PVT Increases
If an asset’s price and its price volume trend increase simultaneously, it acts as a bullish trend confirmation. Since the price is expected to continue its bullish momentum, you can use this opportunity to enter into a long position in the asset.
Price and PVT Decreases
If an asset’s price and its price volume trend decrease simultaneously, it acts as a bearish trend confirmation. Since the price is expected to continue its bearish momentum, you can use this opportunity to sell the asset or take up a short position.
Price Decreases and PVT Increases
If an asset’s price decreases, but its price volume trend increases, it suggests a bullish divergence. A bullish divergence may indicate a potential upcoming upward price reversal. You can use this opportunity to enter into a long position in the asset. However, it is advisable to first confirm the bullish reversal before taking up a position to reduce the risk of the market working against you.
Price Increases and PVT Decreases
If an asset’s price increases, but its price volume trend decreases, it suggests a bearish divergence. A bearish divergence may indicate a potential upcoming downward price reversal. You can use this opportunity to sell the asset or take up a short position. However, remember to first confirm the bearish reversal before taking up a position to reduce the risk of losses.
Volume and PVT Increases
If the trading volume increases along with the price volume trend, it suggests strong pressure from the buyers, meaning that the price is likely to go upward. You can use this opportunity to purchase the asset or go long.
Volume and PVT Decreases
If the trading volume decreases along with the price volume trend, it suggests strong pressure from the sellers, meaning that the price is likely to go downward. You can use this opportunity to sell the asset or take up a short position.
Once you’ve interpreted the price trend of an asset, you can use the insights you gained to employ appropriate trading strategies. Some of the most popular strategies you can use have been outlined below.
Trend-Following Strategy
As the name implies, the trend-following strategy involves taking up a position matching the same direction as the current trend. For instance, if the current trend is bullish, you can take up a long position. On the other hand, if the current trend is bearish, you can take up a short position. This is one of the simplest strategies that you can use.
Breakout Trading Strategy
The breakout trading strategy involves capitalising on the price movements of an asset after it breaks out of a support or resistance level. A support level is a level below which an asset’s price doesn’t fall, whereas a resistance level is a level below which an asset’s price doesn’t rise.
However, asset prices may break out of their support or resistance levels in the face of intense selling or buying pressure. You can use such opportunities to enter into a corresponding position. For instance, if the asset’s price breaks out below its support level due to intense selling pressure, you can enter into a short position to capitalise on the bearish price trend. On the other hand, if the asset’s price breaks out above its resistance level due to strong buying pressure, you may enter into a long position to capitalise on the bullish price trend.
Support and Resistance Trading Strategy
Support and resistance trading strategy involves entering into positions when the asset’s price nears a support or resistance level. For instance, if the asset’s price approaches a strong support level, it may test it briefly before bouncing back up. In such a case, you can enter into a long position soon after the price bounces back up.
Price action is not an indicator but rather a form of technical analysis. It typically emphasises using raw price data of an asset to make trading decisions without relying on traditional indicators. Traders using price action analysis use the price movement in an asset to gain insights into market sentiment and identify trading opportunities.
Using a price screener is very simple and takes only a few seconds. All you need to do is select the price-related criteria from the list of predetermined options. The screener will instantly filter and display stocks that meet your chosen criteria. Price-related criteria in a price stock screener are usually classified on a daily, weekly, monthly and yearly basis.
Volume is a crucial factor in price action analysis since it provides insights into the strength and sustainability of price movements. High volumes during an uptrend or a downtrend suggest that the trend is strong and is likely to continue in the future. However, low or reducing volumes during an uptrend or downtrend suggests a weakening of the trend and may indicate a potential reversal.
Price volume is not a single metric or value that can be calculated. Instead, it refers to the combination of price and volume data of an asset. Although you cannot technically calculate it, you can still monitor the price and volume movements of an asset individually and gain insights into the strength and potential direction of a trend.
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