How to Screen Stocks for Swing Trading?

Swing trading is one of the many options that one can explore to maximize gains in the stock market but you have to learn how to screen stocks for swing trading.

Essentially, the term swing trading can be described as a discipline where positions are held by individuals for more than a day, but not for the very long-term, it is somewhere between a day-trade and a long term trade

It takes advantage of the price movement on the back of some pronounced corporate change which might unfold over a period of time. At times, it could go on for weeks. However, it is important to screen stocks for the most profitable swing trade.

How to Screen Stocks for Swing Trading

Ways To Screen Stocks

While you can employ any number of fundamental analysis or technical tools, here are some easy ways to look for the most relevant plays in the given market scenario

  • Check for market-cap of stocks: Often large caps may see significantly less swing than small caps. But depending on your investment horizon, you have to identify the extent of price swing that is seen in a specific stock. It can be event-based or the next potential move in the stock that is expected going forward. If it is the futures and options category, the rollover week yields relatively more swing compared to the rest of the month.
  • Market condition: The price swing in the stock may also depend on the market condition. If the sentiment in the overall market is extremely bearish or bullish, it will have an impact on the stock price movement. Moreover, track the Volatility Index too. That also has a significant bearing on the extent of the swing that might be expected in the specific stock. Depending on the market condition, the extent of swing can alter significantly. For example, if the market conditions are very volatile, the swing is expected to be more compared to a ranged market with a limited Index move.
  • Look for momentum stocks: Even when the price swing is significant in the market, it makes sense to look for high momentum stocks. The momentum in them could be either event-based or news-driven. Often the volume buzzers or the top trades of the day fall in this category and if you are a new player in the market, it is often the easiest way to book significant profit in the overall market place. Another big advantage of this method is that it helps in identifying potential gainers in an easy and simple way and can help you clock easy profit in a sustained manner.
  • Technical indicators – using Moving Averages: Technical indicators help you identify a series of price points. That way, you will be able to gauge the degree and frequency of a swing in a specific stock quite easily. While you are on a mission to screen stocks, this can be a simple and straight forward tool to identify potential stocks. Often the technical indicators also help to take a precise and definitive position in the market. Needless to mention, there is a definitive degree of accuracy in this method also. Unlike fundamental factors that are often event-driven, these technical indicators, especially moving averages are strictly dependent on the price movement. This significantly reduces the variables at play.
  • Sectoral Signal: Let’s say that you have a specific sector that is performing exceptionally well. But at the same time, it is important to look for strong stocks within that sector. This will help you determine the most relevant sectoral play that helps you in taking advantage of maximum swing.

Popular Technical Indicators to Screen Stocks

When you talk of technical indicators that help you learn how to screen stocks for swing trading, there are many ways and indicators to explore. The trick is to identify the most appropriate options. Here is a quick lowdown on some of the most popular ways to screen stocks using technical indicators.

  • Keep a check on Support, Resistance and Breakouts: Any breakout of support and resistance wither upside or downside may generate huge swings. Always keep a check on these and filter stocks judiciously.

How to Screen Stocks for Swing Trading

  • Price indicators: This is one of the most basic filters using technical analysis. Whether you are looking at 50-day moving averages or 200-day moving averages, this method helps you identify volume players and avoid very low priced stocks that do not have sufficient liquidity to support large investment and the price swing.
  • Look for stocks near 20-day high: Using this filter, you can track down stocks that are expected to see a potential price swing going forward. It helps close in on short-term swings, and the size of the investment can make a huge difference. Often this filter is using in tandem with the 20-day moving average metrics.
  • ADX: You may use ADX in conjunction with moving averages to filter stocks which are trending in a particular direction. ADX is also known as trend strength indicator, a 50+ value of 14 periods ADX indicates strong trend
  • Exponential moving average: This helps screening stocks that have been on the upswing for the past 10 days or so. It helps you to identify potential stocks that can expect a price pullback soon. You can easily gun in for stocks that are poised for pull-back using this particular technical indicator. It helps you to easily scout for volume buzzers on the Index as well as sectoral plays that have a strong influence.
  • VWAP: Volume weighted average price (VWAP) is used by traders to identify strong trending stocks in intraday timeframe. It is calculated by multiplying price with volume for a particular time period, and dividing the result by total volume

Also Read: The Ultimate guide to Swing Trading


Overall, when you look to screen stocks for swing trading, it is important to look for momentum stocks as well as the right market set-up to take advantage of the price swing in it. Especially, if you are a relatively new trader trying to get your hands in the stock market, swing trading can be a great way to start. But, this also means that it makes sense to look for low-risk stocks.

At the same time, you can always take event drive positions. They help in two ways. On the one hand, they bring about certainty on the possibility of a price swing and depending on the news, you can also predict a certain trend, as to which way the stock is likely to veer. Booking profit becomes a lot simpler through this kind of screening of stocks for swing trading.

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