Find Stocks in Momentum | The SHARP Framework That Finds Winners Before They Break Out

[00:00:02]Hey guys, what's up? Welcome to another episode with me Shashang Gapa. I hope you guys are well because market is not doing great. Uh but that's okay.

[00:00:10]Learning should not stop and we will keep learning going forward. Ch. Let's begin. Today what we're going to do is I'm going to show you how to find very good momentum stocks. Okay? And I'm going to do it using the ticker tape screening tool. Right? So what I'm going to do is I'm going to teach you how to do it step by step and we will look at what are the different things I look at as well. It's going to be a very long video. It'll be a medium to long video.

[00:00:31]So please stay in touch and also we put a lot of effort into all of these videos. So please click on the subscribe button so that we can grow this channel and give it to more people outside as well. So the knowledge compounds first things first what we do is we will use a momentum framework for this called the sharp framework. Now this is not sh like the sharp ratio. This is just S h. Now what are we looking here with sharp framework? First we look at the sector always sector bias is very important.

[00:00:56]Now why do I say sector bias is important? If you ask me today Shashank what are some sectors that are doing well because I am looking at the market day in day out. I know for example pharmaceutical sector is doing well your farmer stocks are doing well. Healthcare is doing well. It is trying to do a reversal but auto ancillary is pretty okay. Oil and all is not doing great. So you should have some idea when you play momentum stocks and you play swing trading or any kind of positional trading you should know what is doing well. So let's say we are looking at our pharmaceutical sector. So we have one sector in mind. Then we look at H which is high proximity to your 52- week high.

[00:01:30]Now 52- week high or all-time high ATT at 52-W week high are two very good strategies to look at companies that are breaking a key resistance zone. So if you look at 52- week high, it is very important to look at how far away it is from 52- week high. So I would say 0 to 5% away from 52- week high is a great bet. 0 to 10% also you can find companies that are coming up in momentum. So if I know that pharma is in momentum I would do 0 to 10%. so that I can capture at a much lower rate when it starts moving up. Then acceleration okay which is a part of the momentum. You have one which is proximity to breakout.

[00:02:04]We know the sector we have proximity to breakout. Now what is the speed at which it is coming. Now this we will look at last one month performance. Okay. If in the last one month the stock has been doing well that means speed is also coming coming close to breakout and sector is in momentum. If these three things patch up for me and it matches very well then I have a winner in my hands. Okay. Then we will look at the range floor. How far away it is away from the 52- week low. So I don't want that band to be this much. I want that band to be quite big. So that it's actually bounced quite a bit and it's coming to the 52-W week high. And then finally I will look at the market cap because I want to avoid all of these micro caps and small caps in this. I want to play a good, you know, framework here. And again, we don't have to look at all the companies. We only look at some companies that we can actually think about taking position into it.

[00:02:50]Right. Okay. Now let's go. Let's open ticker tape. And I have already logged in. So let's open ticker tape and let's quickly get into the screener part.

[00:02:56]Okay. Now I'll show you how to do it right here because I know a lot of you guys use ticker tape. So let me show you how to actually do it here. Let's do start screening. And this opens up a page like this. Okay. Now one things first things first let's choose a sector. Let's just do pharma for now.

[00:03:10]Let's let's track pharma. And let's see what is going on with all the pharmaceutical companies and let's see. So now we have around 343 results that are coming here. Now let's slowly filter them down and try to understand how we can make it more streamlined. Okay. Next I will add one month return. So I want one month return to be 10% and above. That means in the last 1 month these stocks have gone up 10% and more. Okay. So if they've gone up 10% and more then definitely this is something interesting for me to look at.

[00:03:40]Okay. So that means movement is going on market is going on. Close price not required. P ratio as of now not required. 1 day return not required.

[00:03:48]Return on equity not required. Price to book not required. Okay. These are these are basically two things that I have put. Now comes the next filter. Now over here I am going to add market cap filter. Market cap is already here. So let's say I want 5,000 and above.

[00:04:02]Depends on where you want to play. I want to play 5,000 and above. So already 23 stocks have only come into this. But not bad. 5,000 and above 1 month return 10% right. and the sector is healthcare.

[00:04:14]Good stocks have basically come into this uh screen. So I'm I'm not bad at all. Now let's do percentage away from 52 week high. So let's do this. Let's remove this part. Let's do percentage away from 52 week high over here. So let's say I want 0 to 10%. As I told you, if the sector is favorable, I would do 0 to 10%. If I feel that I want just high quality stocks, I can even do 0 to 5%. Now you can see again that I only have nine results coming here. Now what is the beauty of these nine results?

[00:04:43]I'll show you. It shows me that the 1 month return of this company which is let's say a 1 lakh cr 1 month return is 20%. And it is 3.45% away from 52- week high. So that means I know that the momentum is definitely there in this that it's already come up 20%. It's just close to the 52- week high. If it breaks the 52- week high then the momentum will continue. And you can see all of that coming here. 11% 15% 20% 30% 29%. So so many companies have come. Now this is definitely one way of getting very premium setups. Then you can go into the stock and find out whether the setup is good or bad depending on your risk management and rules. Now till here it is great to find a good amount of setups. Now I have done a sub sector way but if you don't want subsector you can just choose all the companies right you can just choose all the sectors and obviously it'll show you all the great companies as of today but you are anyway streamlining it so well that it'll only show you the cream of the crop. Okay.

[00:05:38]Now coming to one more what I'm going to do is which is I would say additional. I want to actually add a subsector filter.

[00:05:44]Okay. So let me check if that is there.

[00:05:46]So I'm trying to so this is a pro tool.

[00:05:48]So pro tool means this is only if you have a paid account with ticker tape you can use this. But this is a very important tool. I'm trying to look at PE premium versus sub sector. Now what that what this tool basically does or what this basically does it takes the stock P ratio and divides it by the sub sector P ratio minus one. What that basically says, I want to find companies that are undervalued and in momentum and coming to 52-W week high because I want you to automatically remove all the guys who are supremely overvalued. Remove them.

[00:06:16]Show me companies that are undervalued, growing well and close to 52- week high.

[00:06:21]That is what I am looking at. Okay. So, if I do sub- sector, I will remove uh I will keep this here. I will say I want discount. Okay. Discount means it will show everything that is discounted to the sub sector. So out of nine companies now I'm down to only five companies.

[00:06:35]That means five companies have grown more than 10% in the last 1 month are 0 to 5% away from 52- week high and they are undervalued to the sector. Now this becomes a very strong screen and here I've only screened for the entire healthcare index. Obviously you can screen it for whatever you want going forward, right? But this is basically how I understand it. Now this is great.

[00:07:00]So from a lot of companies you stream it down and as I said you can actually go to sub sector and add whatever you want.

[00:07:04]If you want financials you can add you can add energy but I like playing sector wise because then I can I already know that these are the five companies in the sector that is doing really well. Now due to SEBI regulations I don't want to show you the name of the companies but I've obviously shown you how to do this ticker and the scanner. You can do it however you want. Okay. You can also check out Ticker Tape Pro from the link in the description and in the pinned comment and you can use code shashang4 which gives you 45% off on your yearly subscription. Now let me open and show you one company for example one of the companies that um was giving in this part. Let me show you. I'm going to do view details. Now look at this company.

[00:07:43]Okay. If I do last oneear returns you can see that this company has come and just broken the 52- week high. Okay. If I do max, you can see it here that it is broken the 52-W week high or just at the 52- week high and it has one more all-time high coming close as well. So, this gives me an indication that look some momentum has happened here. 24% gain has happened. So, some momentum has happened here. It is a large cap company with 1.67 volatility. So, it's low risk according to this. And on the left again, this is a pro tool. Only if you have the pro account, you get this. But here it starts giving me the price return. Now, this is the price return for the entire year. But because I have done last one month it has shown me the growth of that valuation seems to be high uh seems to be overvalued versus the market average the here if you see the P ratio it's actually 21 and the sector P is 41 because here you know different valuations come in different type of things right uh like for example sometimes in valuation we look at price to sales instead of price to sometimes we look at price to book price to earnings depends on that but here we see that the sector P is 41 and the price of this company is 21 uh look at growth The fundamentals are growing by around 16%, cash flow is growing by 47% in the last 3 years. So not bad at all. Uh it's average here but I would say not bad because if I'm doing swing trading profitability is very good. ROE ROC's are good. Entry point is average. The stock is overpriced but it is not in the overbought zone and I know that it is very close to an all-time high. So for me it becomes a good entry point and these are the red flags you can see here. No red flag for so right and here you can see very quickly what are the growth uh drivers and what are the challenges. Like for example, it is very difficult for you to go manually and do a lot of fundamental research on it. So this basically gives you like strong financial performance. You can click on it and it'll give you the whole detail acquisitions. So what they do is they make you know they go through all the data and you know obviously they make it into a very easy readable format for you to actually read and understand everything about it. Um these are the price forecast that they have as you can see the price forecast high, median, low. Now this again is very important for you to understand whether this uh riskreward ratio is good or bad right depending on how the price of this movement can happen but please understand it's a forecast don't take it as a ultimate truth it's a forecast right as you can see the mean median low because they forecast the bull bear and you know low case scenario everything is given here earnings forecast is also given here and you want to do fundamental analysis you can do that as well look at this quarter view is there you can go to annual view can check the annual view the growth rate over here PBDS are Here you can download the investor presentations. You can download the annual report, the past annual report and you can also look at the valuations of different companies. So this becomes very easy for me to scan.

[00:10:21]This becomes very easy for me to look at. Here we have the mutual fund holding trend as well. So and the cash dividends that are coming. So as I said this becomes very easy when I scan something with that, you know, screener, it becomes very easy for me to actually understand how to actually do that, right? So again um it's already here as you can see. If you want me to do it again, I can do it quickly again because now we have done it. Okay. So, I'll just show you it to you again. We will do 5,000. We will choose a different sector if you want. This time uh let me take uh it. Let me see if something's coming in.

[00:10:52]So, I'm choosing 5,000 and above. I'm choosing it. We don't need all of this.

[00:10:56]1 month. Yes, we want 10% and above in the last one month return. Uh and then we added what was that? We added 52- week high away from 52 week high. So we want 0 to let's say 5% from 52 week high and then we said sub sector P to sub sector P right we're adding this and I said I want it at a discount so in this we only have two companies today sitting at a discount with a market cap of 8,000 and 5,000 if I do premium you will see seven companies right discount and premium premium I would not take because they're a little overvalued but again it's up to you uh whe how you want to play it but if you do discount you will see that this company has gone up 50%, it is at all time 52 week high today and it is at a discount. Same with this 25%, 3% away from 52 week high at a discount.

[00:11:45]So this is basically how I screen.

[00:11:46]Obviously you can save this screener and I can just um save it like this. Right?

[00:11:51]So this is very interesting. I'm going to save it for myself. That's it. It's a very easy way to find good companies for long-term which are also um undervalued.

[00:11:59]You can use this for swing. You can use this for longterm. But you still have to do your own fundamental analysis before taking any call. Okay? If you don't do fundamental analysis, it'll become a big issue. You have to also ensure that you do proper risk management over here. If you don't have good risk management capabilities, then that will also create a big problem for you. So, basically, right sector, right size, already moving, strength, acceleration, everything there that is why it is so good. Now, if you want to try the screener yourself, I'm going to put this screen link for you guys. The link to ticker tape is also there in the description. So, you can go and have a look at it as well. This is me Shashang Gurupa signing off. And again as I said don't forget to subscribe to the channel because we are trying to grow the channel so we can reach as many people as possible. Right? Again this is an educational channel and we want to give as much education as possible to you guys. Okay. Awesome. This is me Shashanga signing off guys. Take care.

[00:12:49]See you. Bye-bye.