Brief Summary
This video explains two methods for sector analysis to identify strong sectors and stocks within them for short-term, medium-term, and long-term trading. It covers using TradingView for sector comparison and introduces a new method using the R Zone platform by Define Edge Securities, which offers a multi-timeframe matrix ranking system for efficient sector and stock screening.
- Two methods for sector analysis are explained.
- R Zone platform by Define Edge Securities is introduced.
- Step-by-step guide on how to use the platform.
Introduction
The video introduces sector rotation and analysis for stock selection. It aims to teach viewers how to identify strong sectors in the market for short-term, medium-term, and long-term investments, and then find strong stocks within those sectors. The presenter outlines a two-step process: first, identify the strong sectors, and second, find the strong stocks within those sectors to improve stock selection.
TradingView Method for Sector Analysis
The presenter reviews a previously shared method using TradingView, where various sectors are added to a platform to compare their performance. By clicking on "YT" (Year-to-Date), users can see which sectors are outperforming. The drawback of this method is that sectors must be manually added, and comparing individual stocks within a sector requires creating separate comparison charts, which can be time-consuming. A detailed video on sector analysis using TradingView is linked for reference.
Introduction to R Zone Platform
The presenter introduces a new method using the R Zone platform by Define Edge Securities. This platform offers multiple scanners, but the presenter focuses on a feature found under "Matrix Price and Relative Strength" called "MTF Ultimate Matrix Ranking". This feature allows users to scan multiple sectors across different time frames.
Using MTF Ultimate Matrix Ranking
To use the MTF Ultimate Matrix Ranking, users select "All Sector" to view listed sectors. The platform displays sectors with scores based on box sizes of 0.25%, 1%, and 3%, representing short-term, medium-term, and long-term performance, respectively. The scanner compares each sector against others; a point is awarded if a sector outperforms another, and zero points are given if it does not. The highest possible score is one less than the total number of sectors being compared, as a sector will score zero when compared to itself.
Analyzing Sector Performance
By sorting the sectors by their total scores, the presenter identifies the strongest sectors across all time frames. For example, Nifty Mid and Small Cap Financial Services shows a high score, indicating strong performance in short, medium, and long term. The presenter also notes which sectors are underperforming in each time frame, such as IT in the short term. The total score provides an overview of sectors that perform well across all time horizons.
Scanning Stocks within a Specific Sector
The presenter demonstrates how to narrow down the analysis to specific sectors, such as PSU Banks. By selecting the PSU Bank sector, the scanner focuses on the stocks within that sector. The platform then ranks these stocks based on their short-term, medium-term, and long-term performance. For instance, Canara Bank is identified as a strong performer overall within the PSU Bank sector.
Analyzing Individual Stocks
The presenter analyzes individual stocks like Canara Bank, Indian Bank, and Bank of Maharashtra using monthly time frames to identify potential trading opportunities. Canara Bank shows a multi-year breakout, making it a preferred choice. Indian Bank is strong but not a fresh breakout, suitable for long-term investment. Bank of Maharashtra does not fit the presenter's specific setup.
Analyzing Financial Services Sector
The presenter scans the Financial Services sector, which includes 30 stocks. The platform automatically updates, eliminating the manual effort required in TradingView. JM Financial is identified as a top performer, and its chart is analyzed for potential setups. Muthoot Finance and HUDCO are also examined, with HUDCO showing a potential breakout opportunity.
Analyzing Oil and Gas Sector
The presenter scans the Oil and Gas sector, which includes 15 stocks. IOC, BPCL, and ONGC are identified as top performers. BPCL shows a potential trade setup, while IOC and ONGC do not currently align with the presenter's criteria.
Additional Features and Conclusion
The presenter mentions that charts can be viewed directly within the R Zone platform, although he prefers using TradingView due to familiarity. The R Zone platform is available to Define Edge Securities account holders, offering a one-month free trial. The platform's fees can be offset by brokerage credits. The video concludes by encouraging viewers to like, share, and subscribe for more content.
