In the fast-paced world of stock trading, there’s a smart strategy called swing trading. It’s not about long-term commitments or quick day trades but rather making gains from short to medium-term market ups and downs. It’s like catching waves in the stock market to secure profits without constantly watching. In this article, let’s look at the best stocks for swing trading based on fundamental indicators.

Note: The data is from 29th August 2024. The stock selection for swing trading was made on Tickertape Stock Screener and based on the following parameters.

Market Cap: Above 5,000 (Set the lower limit to 5,000) Debt-to-Equity Ratio: Below 0.50 (Set the higher limit to 0.50)5Y Avg ROE: Above 0 (Set the lower limit to 0)Create a custom filter for PEG Ratio: PE Ratio/Earnings Per Share – Set its limit above 2

Note that these stocks are in no order of preference. Please note that these stock selection criteria and the stocks are provided for informational purposes only; it is essential to conduct your own research.

🚀 Pro Tip: Explore Tickertape’s Financial Statements for detailed company financial reports to make informed investment decisions.

Bharat Dynamics Limited (BDL) is a prominent defence PSU in India, specialising in the production of Surface-to-Air Missiles (SAMs), Anti-Tank Guided Missiles (ATGMs), underwater weapons, launchers, Counter Measures Dispensing Systems (CMDS), and test equipment. The company also refurbishes and extends the service life of stored and deployed missiles. As of 29th August 2024, the company’s market capitalisation is Rs. 48,094.83 cr., and its share price closed at Rs. 1,323.25. Bharat Dynamics Ltd’s PEG ratio is 4.72%, and the debt-to-equity ratio is 0.28%. The 5-yr average return on equity of the stock is 16.09%.

Nippon Life India Asset Management Limited (NAM India), formerly known as Reliance Nippon Life Asset Management Limited, is one of India’s largest asset management companies. NAM India serves as the asset manager for Nippon India Mutual Fund (NIMF) and offers a wide range of services, including mutual funds, Exchange Traded Funds (ETFs), Portfolio Management Services (PMS), Alternative Investment Funds, Pension Funds, and Offshore Funds and Advisory Mandates. Over the last 5 years, the company’s net income has grown at a yearly rate of 17.9%, higher than the industry average of 12.75%. As of 29th August 2024, the company’s market capitalisation is Rs. 44,168.07 cr., and its share price closed at Rs. 696.5.Chennai Stock

Central Depository Services (India) Limited (CDSL) was established in Mumbai on 12th December 1997 as a Public Limited Company. The company received its Certificate of Commencement of Business from the Ministry of Corporate Affairs on 19th December 1997. SEBI registered CDSL on 19th August 1998 under Depositories Regulations and later received its certificate to operate as a depository on 8th February 1999. Over the last 5 years, the company’s revenue has grown at a yearly rate of 29.89%, higher than the industry average of 16.61%, and its market share increased from 6.18% to 19.43%. As of 29th August 2024, the company has a market capitalisation of Rs. 32,075.23 cr., and its share price closed at Rs. 1,493.25.

Vinati Organics Limited (VOL) is a leading manufacturer of speciality chemicals, organic intermediates, and monomers, with a growing market presence in over 35 countries. With over 30 years in the industry, VOL has transformed from a single-product manufacturer into an integrated supplier to major industrial and chemical companies in the US, Europe, and Asia. Over the last 5 years, the company’s revenue has grown at a yearly rate of 10.86%, higher than the industry average of 6.54%, and its market share increased from 1.96% to 2.32%. As of 29th August 2024, the company has a market capitalisation of Rs. 20,844.56 cr., and its share price closed at Rs. 2,004.3.

Techno Electric & Engineering Company Limited, formerly Simran Wind Project Limited, was established as a Public Limited Company on 26th October 2005. The Company is well-regarded for its expertise in light construction and heavy engineering within the power sector. It also generates wind power through wind turbine generators in Tamil Nadu and Karnataka, offering engineering, procurement, and construction services across power generation, transmission, and distribution. Over the last 5 years, the company’s revenue has grown at a yearly rate of 9.07%, higher than the industry average of 8.97%, and its market share increased from 0.35% to 0.36%. As of 29th August 2024, the company has a market capitalisation of Rs. 19,800.00 cr., and its share price closed at Rs. 1,654.85.

IDFC Bank, headquartered in Mumbai, is a universal bank providing financial solutions through its nationwide branches, online platforms, and mobile services. The bank offers a range of basic services, including Savings Accounts, NRI Accounts, Fixed Deposits, and various loans, aiming to make banking convenient and accessible through technology and a service-oriented approach. It serves individuals, corporations, small and micro enterprises, entrepreneurs, financial institutions, and government bodies with tailored financial solutionsVaranasi Wealth Management. Over the last 5 years, the company’s revenue has grown at a yearly rate of 15.86%, higher than the industry average of 11.19%, and its market share increased from 0.54% to 0.81%Bangalore Investment. As of 29th August 2024, the company has a market capitalisation of Rs. 18,054.22 cr., and its share price closed at Rs. 111.95.

Clean Science and Technology Limited, initially incorporated as ‘Sri Distikemi Private Limited’ on 7 November 2003 in Pune, Maharashtra, began as a Private Limited Company. The name was changed to ‘Clean Science and Technology Private Limited’ on 31 July 2006 after a shareholders’ resolution. The company manufactures and exports various chemicals, including MEHQ, Guaiacol, and 4MAP, from its plant in Kurkumbh MIDC, Pune. It is one of the few global companies dedicated to developing new technologies through in-house catalytic processes that are both eco-friendly and cost-effective. Over the last 5 years, the company’s revenue has grown at a yearly rate of 15.53%, higher than the industry average of 6.54%, and its market share increased from 0.68% to 1%. As of 29th August 2024, the company has a market capitalisation of Rs. 16,232.64 cr., and its share price closed at Rs. 1,514.1.

Data Patterns (India) Limited, initially incorporated as ‘Indus Teqsite Private Limited’ on 11 November 1998 in Bangalore, underwent a name change on 4 August 2021 following a merger with its former subsidiary. Data Patterns (India) Limited is a leading and rapidly growing provider of vertically integrated defence and aerospace electronics solutions in India. The company manufactures electronic boards and systems, catering to various defence and aerospace platforms, including space, air, land, and sea. Over the last 5 years, the company’s revenue has grown at a yearly rate of 33.69%, higher than the industry average of 8.49%, and its market share increased from 0.55% to 1.55%. As of 29th August 2024, the company has a market capitalisation of Rs. 16,084.75 cr., and its share price closed at Rs. 2,871.85.

Alkyl Amines Chemicals (AACL) is a global producer of amines, amine derivatives, and speciality chemicals. The company operates three manufacturing sites—two in Maharashtra (Patalganga and Kurkumbh) and one in Gujarat (Dahej). It also has an R&D centre in Pune, Maharashtra, equipped with advanced equipment, and a solar plant in Bhoom, Maharashtra. AACL’s products are used in various industries, including pharmaceuticals, agrochemicals, water treatment, foundry, and rubber chemicals. Over the last 5 years, the company’s revenue has grown at a yearly rate of 11.35%, higher than the industry average of 6.54%, and its market share increased from 1.44% to 1.74%. As of 29th August 2024, the company had a market capitalisation of Rs. 10,879.40 cr., and its share price closed at Rs. 2,113.2.

Kirloskar Pneumatic Company Limited (formerly K G Khosla Compressors Ltd.), part of the Kirloskar Group, was established in November 1974. Originally promoted by K G Khosla, the company changed its name to Kirloskar Pneumatic Company Limited after merging with Kirloskar Pneumatic Company in 2002. KPCL operates across various sectors, including industrial, oil and gas, infrastructure, and food processing. The company focuses on compression and transmission solutions. Over the last 5 years, the company’s revenue has grown at a yearly rate of 13.11%, higher than the industry average of 10.73%, and its market share increased from 1% to 1.14%. As of 29th August 2024, the company had a market capitalisation of Rs. 8,158.15 cr., and its share price closed at Rs. 1,255.65.

Did You Know You Can Invest in Stocks with smallcase?

Discover the convenience of investing in stocks through ready-made portfolios curated by SEBI-registered experts.

Before diving in, let’s understand what smallcase is.

smallcases are modern investment products that help investors build low-cost, long-term & diversified portfolios with ease. A smallcase is a basket or portfolio of stocks/ETFs representing an idea – an objective, theme, or strategy. They are created and managed by SEBI-registered experts.

Among 500+ smallcases, here’s the top swing trading smallcases you can check out:

Disclosure on Wright 🌱 Smallcaps

Disclosure for Trends Trilogy

Note: The smallcases are mentioned only for educational purposes and are not meant to be recommendatory. Investors must conduct their own research and consult a financial expert before making any investment decisions.

When it comes to selecting the best stocks for swing trading, several key factors come into play. One popular approach uses fundamental indicators such as the Price to Earnings to Growth ratio (PEG), debt-to-equity, and Return on Equity (ROE) to filter potential stocksSurat Investment. The PEG ratio helps evaluate a stock’s valuation relative to its growth prospects, while the debt-to-equity ratio assesses the company’s financial leverage.

Additionally, ROE provides insight into the profitability and efficiency of a company. By considering these indicators, swing traders can identify stocks with solid growth potential, manageable debt levels, and strong profitability, increasing the likelihood of capturing favourable price movements during their trading timeframes.

Swing trading is a trading strategy that involves holding positions in financial assets for short periods, typically several days to several weeks, in order to capitalise on short-term price movements. It is a speculative practice aimed at producing capital gains in the medium term, often leveraging technical analysis to determine optimal entry and exit points. Swing traders focus on short-term trends and aim to profit from expected price moves, utilizing patterns and signals that indicate potential future movements in stock prices.

Unlike day trading, where positions are opened and closed within the same day, swing trading allows positions to be held over several days or weeks. This strategy enables traders to avoid the intraday market noise but exposes them to overnight and weekend market risks, where prices could change dramatically due to off-hours news events. Swing trading is adaptable to various financial markets and is particularly popular among traders seeking to actively manage their swing trading portfolios actively, optimising positions to take advantage of stock price oscillations and market volatility. It offers a balance for those looking for larger gains than typical buy-and-hold strategies but who do not wish to engage in the constant monitoring required by day trading.

Potential for substantial profits: Swing trading has the potential for substantial profits by capitalising on swift market moves. This trading style allows traders to yield significant returns over short periods, taking advantage of quick shifts in market dynamics.Market momentum utilisation: Swing trading leverages short-term trends to benefit from market momentum. By focusing on these trends, traders can strategically position themselves to profit from the market’s directional momentum, which is often driven by broader economic indicators or sector-specific news.Reduced overnight risk: Swing trading involves reduced overnight risk compared to day trading. By holding positions for several days, swing traders are less exposed to the risks that come from overnight market changes, which can be unpredictable and driven by off-hour news events.Part-time suitability: Swing trading offers flexibility, making it suitable for those with other commitments.** This approach to trading can accommodate part-time engagement, allowing individuals to trade without needing to monitor the markets continuously throughout the day.Diverse opportunities: Swing traders have access to diverse opportunities across various markets and sectors. This trading style is not limited to specific types of assets or markets, providing traders with the flexibility to explore a wide array of opportunities depending on their interests and market conditions.Technical analysis application: Swing trading employs technical analysis to enhance decision-making by identifying potential entry and exit points. Utilising charts, the best indicators for swing trading, and historical data, swing traders can make informed decisions on when to enter or exit trades, optimising their chances for profit.Lower transaction costs: Swing trading can lead to lower transaction costs over time due to fewer trades compared to day trading. By engaging in fewer transactions, swing traders can potentially save on costs associated with trading, such as commissions and spreads, which can add up in more active trading styles.

Swing trading, a popular trading strategy, involves buying and selling financial assets within a short period, typically several days to several weeks, to capitalise on short-term price movements. While it can be a lucrative way to generate income, swing trading also carries risks that investors should be aware of.

Higher Risk Involved: Despite the knowledge element required in swing trading, there are often higher risks involved. Even if one uses the best of techniques, stock markets are unpredictable and may result in losses at times. Using stop-loss orders can help in limiting the losses due to movements within a short span.Market Risk and Position Risk: When it comes to trading, there are two types of risk: market risk and position risk. Most traders experience both forms of risk. However, swing traders are more likely to experience position risk than market risk. This is due to the strategy of looking to profit off short-term price movements.Vulnerability to Gap Ups and Gap Downs: In swing trading, vulnerability to gap ups and gap downs is there. If your trade is in the opposite direction and the stock or index opens with a gap up or gap down, it could lead to heavy losses, and even stop losses are not able to protect in such cases.Managing Risk in Swing Trading: To manage risk in high volatile stocks for swing trading, traders can use strategies such as trading smaller positions, using stop-loss orders, and diversifying their portfolios. These strategies can help limit the losses due to movements within a short span and ensure that the risk is managed effectively.

Swing trading can be a lucrative way to generate income in the stock market, but it is essential to manage risk to ensure that the strategy is successful. By understanding the risks involved and using strategies to manage them, investors can minimise their exposure to losses and maximise their returns.

For swing trading in India, the ideal time frame generally spans from a few days to a few weeks. This approach aims to leverage short- to medium-term price movements in stocks or financial instruments. Here’s an overview of effective time frames for swing trading:

1 Week to 4 Weeks: This time frame is highly popular as it allows traders to benefit from short-term price shifts while avoiding daily market fluctuations. It provides sufficient time for stocks to move in the anticipated direction.Daily and Weekly Charts: Swing traders often use daily charts for precise entry and exit points and weekly charts for a broader view of stock trends. This combination helps confirm the overall market direction.Market Conditions & Trading Strategies: The choice of time frame should align with current market conditions. In volatile markets, shorter time frames may be more effective, while stable markets can favour more extended time frames. Different swing trading strategies also influence the ideal time frame. Momentum strategies may benefit from shorter periods, whereas trend-following strategies might work better over longer durations.

Note: Technical analysis is crucial for swing trading, involving the examination of stock charts and indicators to determine optimal entry and exit points. This method can help identify the best times to participate in swing trading by maximising potential profits from market movements.

Here is a table of comparison between day trading vs swing trading:

Swing trading, like all trading strategies, involves risk and isn’t inherently “safe.” While it can offer substantial profits, it also exposes traders to potential losses. The risks arise in even the best volatile stocks for swing trading from market volatility, the need for accurate timing in entering and exiting positions, and exposure to overnight and weekend price changes. Traders can manage these risks by using stop-loss orders, diversifying their investments, and staying informed about market conditions. Ultimately, the safety of swing trading depends on an individual’s risk tolerance, market knowledge, and trading discipline.

Stock selection criteria for swing trading varies from investor to investor. Remember, it is crucial to conduct your own research before investing. For this purpose, #TickertapeHaiNa! With over 200 filters, custom filters, pre-built screens, custom universes, a linking watchlist, export data, and more features, Tickertape Stock Screener is your perfect companion for finding the next best stock for your portfolio. Don’t wait; seize the opportunity now!