Last Updated – December 2020
In the below article we will cover,
– What is Intraday Trading
– Factors to consider while determining the best stocks for intraday trading
– A comprehensive list of the best stocks for intraday trading
– Methods to select the best stocks for intraday trading
– A model portfolio condensed to 10 best stocks for intraday trading
– Technical and Fundamental analysis of the top intraday stocks in the Model portfolio
What is Intraday trading?
Intraday trading means a trader is buying and selling shares or other trading instruments on the same day to benefit from the stock price movement during the day. In short, a trader closes his open trades before the closing of the trading session and hence in the process, he does not end up carrying any overnight risk which can impact his profits. There has been a sharp surge in intraday trading volumes in recent years due to increasing Demat account holders and reduced trading costs due to the introduction of the Discount Broking concept, wherein the charges are unlike what a traditional broker used to charge as brokerage.
Additionally, Intraday trading can be done in any segment whether it is cash, futures and options (F&O) of stocks or indices, commodity, and currency derivatives. One advantage of intraday trading is one can take leveraged positions in stocks that are not available in the F&O segment.
Even though intraday trading eliminates overnight risk, there are other risks such as sudden news during trading hours, illiquidity in the instrument, and fluctuating volatility of the instruments. Other factors such as trading plan, money management, and risk management also impact a traders’ profitability in the long term.
Trading is a stream where profits and losses affect human psychology and thus his decision-making ability gets highly impacted by his state of mind while placing a trade. High optimism or overconfidence due to large profits or long streaks of profits can lead to taking oversized positions by taking a big risk or holding losing positions for a longer time in the hope of turning them positive. Similarly, recent losses or streak of losses can lead to taking undersized positions despite the right trading setup or cutting profit-making positions early. Hence it is very important to trade based on a trading plan and not trade based on one’s emotional bias and gut feelings.
Factors a trader must consider while determining the best stocks for intraday trading
There are various things to keep in mind while determining the best stocks for intraday trading.
Firstly, traders should decide on criteria as to how much risk should be taken per trade and how many maximum positions should remain open at a time. As there are occasions when multiple trades are open which can become quite complex as long and short trades would be open in different stocks.
If trades have been taken on some technical setup, it is prudent to check if there is any corporate event scheduled on the same stock. This checkup should be done on a routine basis as scheduled events bring both challenges and opportunities with them, whatever the outcome may be, it is good to remain informed of any scheduled events.
Volatility and Liquidity
Volatility and liquidity are also very critical for intraday trading. High volatility means large price movements during the day which translates to more trading opportunities and low volatility means fewer trading opportunities. The volatility should not come at the cost of liquidity as liquidity is very crucial for entry and exits during the day and to place sizable trades.
Traders should avoid highly volatile bets and thinly traded stocks as there are times when traders get stuck on one side of the trade and cannot exit due to illiquidity or circuit limits. Sometimes the spread between the bid and ask prices is also wide enough which impacts trading costs. This occasionally happens in thinly traded penny stocks as well as thinly traded index and stock options. Volatility can be attributed to the behavior of stocks also. The pattern of volatility should not be seen in the context of a particular day or week, rather stocks that have a history of volatile trading and are highly traded should be selected as trading candidates. One such list of stocks is mentioned below.
The list has been prepared by extensively analyzing the volatility and liquidity of top intraday stocks on NSE and BSE given the recent history. However, volatility is varying in natur,e thus the stocks should not be considered as the ultimate list as their volatilities and liquidity can keep changing over a period of time.
Summary table of Best Intraday Stocks to Buy now in India
|Sr. No||Company Name||BSE Scrip Code||NSE Symbol||CMP (Rs.) 4 Dec||Rating (stars)||Industry|
|1||AXIS BANK||532215||AXISBANK||616||2||PRIVATE SECTOR BANK|
|2||BAJAJ FINANCE||500034||BAJFINANCE||4877.45||4.5||LEASING & HIRE PURCHASE FINANCE|
|3||BANDHAN BANK||541153||BANDHANBNK||394.5||5||PRIVATE SECTOR BANK|
|5||ICICI BANK||532174||ICICIBANK||503.5||3||PRIVATE SECTOR BANK|
|6||INDIABULLS HOUSING FINANCE LTD||535789||IBULHSGFIN||194||4.5||HOUSING FINANCE|
|7||INDUSIND BANK||532187||INDUSINDBK||916.25||4||PRIVATE SECTOR BANK|
|8||JINDAL STEEL & POWER||532286||JINDALSTEL||266.7||0.5||SPONGE IRON STEEL|
|9||MAHINDRA & MAHINDRA FINANCIAL SERVICES||532720||M&MFIN||168||4.5||LEASING & HIRE PURCHASE FINANCE|
|11||RBL BANK||540065||RBLBANK||237.5||1||PRIVATE SECTOR BANK|
|12||STATE BANK OF INDIA||500112||SBIN||264.05||1||PUBLIC SECTOR BANK|
|13||SHRIRAM TRANSPORT FINANCE CO||511218||SRTRANSFIN||1002.65||5||LEASING & HIRE PURCHASE FINANCE|
|14||TATA MOTORS||500570||TATAMOTORS||184.25||0.5||LCVS & HCVS AUTO|
|15||ZEE ENTERTAINMENT ENTERPRISES||505537||ZEEL||206.75||0.5||MEDIA & ENTERTAINMENT|
Volatility and liquidity should be primarily at the top of a trader’s mind while selecting stocks for intraday trading. However, other factors like market cycles, stocks in the news, stocks with technical trade setups can be included in the list and actively tracked especially when they are trading at day’s high or day’s low. For preparing a list of intraday trades based on volatility, indicators like ATR, standard deviations can be used over a period of time say in the last 50 or 100 days. Whereas for liquidity average, turnover of the last 100 days can be used to determine top liquid stocks. Stocks that appear at the top of both liquidity and volatility lists should then be selected for the trading universe.
Methods to select stocks for intraday trading
There is no doubt that Nifty and Banknifty indices are the highest traded instruments for intraday trading as these indices are tracked and traded by FIIs, DIIs hedge funds, and other institutions along with the public for hedging and speculation. One important thing to notice in the above-given list is that there are no top market cap stocks like Reliance, HDFC, HDFC Bank, ITC, Infosys, and TCS. These stocks are highly liquid but they are not highly volatile due to their size and stability in their business. One more thing to notice in the above list contains many stocks from the banking and NBFC sector which are highly volatile sectors and are largely traded.
Brief detail about each company from the watchlist table will give you an idea of what kind of stocks should be selected for intraday trading.
Axis Bank is the third-largest private-sector Indian bank and offers a range of financial products. The bank has its head office in Mumbai. It has 4500+ branches, a wide network of ATMs, and 10+ international offices. It sells financial services to large and mid-size companies, SME and retail businesses. It has a market capitalization of Rs. 1,87,700+ Crore. As of September 2020, 14.78% shares are owned by promoters and promoter group. The remaining 85.22% of total shares are owned by mutual funds, FIIs, banks, insurance companies, corporate bodies, and individual investors among others. The average trading range for the stock ranges from 2 to 4 percent with a daily turnover of more than 900 Cr. The stock has an average daily trading volume of 35 lac shares.
Bajaj Finance Limited is one of the largest players in the burgeoning consumer finance segment in India and a pioneer in introducing interest-free EMI finance options in more than 50 categories, ranging from consumer durables to lifestyle products to groceries. Apart from consumer finance, the company also has substantial business penetration in SME, commercial, and rural lending. The company has a market capitalization of Rs. 2,91,800+Crore. Promoter group holds around 56.12% of the total shares while 43.56% are held by mutual funds, other institutions, and the public. The average daily range for the stock remains around 1.75% to 4% with an average daily turnover of more than 1000 Cr. Stock has an average daily trading volume of 13 lacs.
Bandhan Bank Ltd. is an Indian banking and financial services company headquartered in Kolkata, West Bengal. Bandhan Bank is present in 34 out of 36 states and Union Territories of India. Presently Bandhan Bank has 4,559 banking outlets pan-India serving more than 2.03 crore customers. Bank has a market cap of Rs. 68000+ Cr. Promoter group holds around 60% of total shares while 40% are held by FII, mutual funds, and public and other institutions. The stock has an average trading range from 2.8% to 5% and an average daily turnover of more than 300 Cr. Stock has an average daily trading volume of 19 lacs.
Bharti Airtel Limited, also known as Airtel, is an Indian global telecommunications services company based in New Delhi. It operates in 18 countries across South Asia and Africa. Airtel provides GSM, 3G, 4G LTE, 4G+ mobile services, fixed-line broadband, and voice services depending upon the country of operation. Airtel had also rolled out its VoLTE technology across all Indian telecom circles. It is the second-largest mobile network operator in India and the second-largest mobile network operator in the world with over 423.28 million subscribers. The company has a market cap of Rs. 274000+ Cr. The promoter group holds 56.23% of total shares and the remaining 43.74% of the total is held by FII, mutual funds, public, and others. The stock has an average daily range of 2.30% to 4.50% and an average daily turnover of more than 800 crores. Stock has an average daily trading volume of 14 lac shares.
Indiabulls Housing Finance
Indiabulls Housing Finance Limited is a mortgage lender headquartered in Gurugram, Haryana. It is India’s second-largest housing finance company and is regulated by the National Housing Bank. It is part of the Indiabulls group and contributes approximately 80% of the group’s turnover. The company has a market cap of Rs. 8900+ Cr. Promoter group holds 21.67% stake in the company and the rest 74.62% is held by FII, insurance companies, institutions, and the public. The stock has an average trading range from 4% to 6% and an average daily turnover of more than 1000 crore. Stock has an average daily trading volume of 42 lac shares.
IndusInd Bank Limited is an Indian new generation bank in Pune, established in 1994. The bank offers commercial, transactional, and electronic banking products and services. As of June 2020, IndusInd Bank had nearly 2000 branches, and around 2500 ATMs spread across different geographical locations of the country. It also has representative offices in London, Dubai, and Abu Dhabi. The bank has a market cap of Rs. 69,900+ Cr. with the promoter group holding 13.45% shares while the rest 85.35% are held by FIIs, public, and others collectively. The stock has an average trading range from 3.5% to 5% and an average daily turnover of more than 600 crores. Stock has an average daily trading volume of 29 lac shares.
Jindal Steel & Power
Jindal Steel and Power Limited (JSPL) is an Indian steel and energy company based in Hisar. With a turnover of approx. US$ 5.5 billion, JSPL is a part of about US$18 billion diversified Jindal Group conglomerate. JSPL is a leading player in steel, power, mining, oil and gas and infrastructure in India. The company produces steel and power through backward integration from its own captive coal and iron-ore mines. In terms of tonnage, it is the third-largest steel producer in India. The company manufactures and sells sponge iron, mild steel slabs, ferro chrome, iron ore, mild steel, structural, hot rolled plates and coils, and coal-based sponge iron. The company has a market capitalization of 26,500+ crore in which the promoter group holds 60.47% shares and 39.53% shares are held by mutual funds, FII and others. The stock has an average daily trading range from 4% to 6.5% and an average daily turnover of more than 250 crores. Stock has an average daily trading volume of 16 lacs.
RBL Bank is an Indian private sector bank headquartered in Mumbai and founded in 1943. It offers services across six verticals: corporate and institutional banking, commercial banking, branch, and business banking, retail assets, development banking and financial inclusion, treasury and financial market operations. RBL bank has a market cap of Rs. 14,000+ Crs all of which are held by mutual funds, FIIs, insurance companies, institutions, and the public. The stock has an average trading range from 3.00% to 5.00% and an average daily turnover of approx. 290 crores. Stock has an average daily trading volume of 40 lac shares.
Tata Motors Limited is an Indian multinational automotive manufacturing company headquartered in Mumbai, Maharashtra. It is a part of Tata Group, an Indian conglomerate. Its products include passenger cars, trucks, vans, coaches, buses, sports cars, construction equipment, and military vehicles. Tata Motors has a market capitalization of Rs 55,000+ crores. The promoter group holds 42.39% in the company while 57.61% is held by FII, insurance companies, and the public. The stock has an average daily trading range of 3.40% to 5.20% and an average daily turnover of more than 500 crores. Stock has an average daily trading volume of 64 lacs.
Zee Entertainment Enterprises
Zee Entertainment Enterprises Limited is the media and entertainment broadcasting company of the Essel Group. It is the primary profit-generating company of the Essel Group. It owns a constellation of entertainment channels under the brand name of Zee. The Zee Entertainment Enterprise also owns and operates the record label of Zee Music Company and the film studio of Zee Studios. Zee Entertainment has a market cap of Rs. 20,000+ Crs in which the promoter group holds 4.02% shares while the rest 95.98% stake is held by FIIs, mutual funds, institutions, and public. The stock has an average trading range from 5.35% to 7.00% and an average turnover of more than 400 crores. Stock has an average daily trading volume of 18 lac shares.
Here’s a quick video from our team on how you can select the Best Intraday Stocks:
If one wants to bring down the watchlist to 10 stocks then the below stocks will be ideal candidates for intraday trading along with Nifty and BankNifty indices.
|Sr. No.||Company Name||CMP (Rs.) 4 Dec|
|5||INDIABULLS HOUSING FINANCE||194|
|7||JINDAL STEEL & POWER||266.7|
A detailed table with various parameters for Best Intraday Stocks to buy:
|Sr. No||Company Name||BSE Scrip Code||NSE Symbol||CMP (Rs.) 4 Dec||Rating (stars)||Industry||Mcap||Average Daily Turnover||Average Daily Trading Range||VWAP (Volume Weighted Average Price) 17 July||Average Volume|
|1||AXIS BANK||532215||AXISBANK||616||2||PRIVATE SECTOR BANK||1,87,730.71||920.1444||5.1||435.38||34818196|
|2||BAJAJ FINANCE||500034||BAJFINANCE||4877.45||4.5||LEASING & HIRE PURCHASE FINANCE||2,91,839.07||920.0977||5.65||3389.56||13813716|
|3||BANDHAN BANK||541153||BANDHANBNK||394.5||5||PRIVATE SECTOR BANK||68,167.04||176.0955||6.58||352.45||18996646|
|5||ICICI BANK||532174||ICICIBANK||503.5||3||PRIVATE SECTOR BANK||3,55,529.51||1339.18||4.4||362.85||38763324|
|6||INDIABULLS HOUSING FINANCE||535789||IBULHSGFIN||194||4.5||HOUSING FINANCE||8,921.02||916.8894||8.28||222.84||42245880|
|7||INDUSIND BANK||532187||INDUSINDBK||916.25||4||PRIVATE SECTOR BANK||69,986.86||805.6471||6.11||530.7||29163208|
|8||JINDAL STEEL & POWER||532286||JINDALSTEL||266.7||0.5||SPONGE IRON STEEL||26,591.82||294.8917||5.42||176.63||16781780|
|9||MAHINDRA & MAHINDRA FINANCIAL SERVICES||532720||M&MFIN||168||4.5||LEASING & HIRE PURCHASE FINANCE||21,368.49||119.9||6.27||206.95||16849060|
|11||RBL BANK||540065||RBLBANK||237.5||1||PRIVATE SECTOR BANK||14,083.08||417.6084||6.83||170.63||39467860|
|12||STATE BANK OF INDIA||500112||SBIN||264.05||1||PUBLIC SECTOR BANK||2,43,151.04||1291.22||3.91||188.29||65051180|
|13||SHRIRAM TRANSPORT FINANCE CO||511218||SRTRANSFIN||1002.65||5||LEASING & HIRE PURCHASE FINANCE||26,391.79||240.46||5.81||691||5102227|
|14||TATA MOTORS||500570||TATAMOTORS||184.25||0.5||LCVS & HCVS AUTO||55,230.85||635.7453||4.94||105.89||64015492|
|15||ZEE ENTERTAINMENT ENTERPRISES||505537||ZEEL||206.75||0.5||MEDIA & ENTERTAINMENT||20,415.52||457.5166||5.78||155.96||18099858|
Our Collection of Best Stocks to Buy Other links you may find useful:
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