Upper circuit stocks often grab traders’ attention because they indicate high demand and high momentum in the market. They are the stocks that reach the daily price limit, and no additional buying orders can raise their price during that day.
To most traders, early identification of such moves can create short-term trading opportunities or bring forth upcoming trends.
In this blog, we will explore the strategies that traders can use to track upper circuit stocks.
Why Traders Track Upper Circuit Stocks
Traders track upper circuit stocks because they tend to indicate robust buying activity and abrupt price action. These stocks have the potential to provide short-term returns when demand surges.
A stock that reaches its upper circuit is often due to news, earnings announcements, or unusual market action that draws notice.
Volume and delivery percentages are also monitored by traders to determine the strength of the move.
Monitoring these stocks assists in identifying the breakout patterns early and strategising entry or exits better. It’s a way to stay ahead of sharp market moves.
Strategies to Track Upper Circuit Stocks
Monitoring upper circuits does not only involve identifying price fluctuations. It’s about knowing why they move like that and how to track them before they are noticed by the crowd. These are some strategies to track upper circuit stocks.
1. Use Stock Screeners Regularly
Stock screeners assist you in quickly finding which stocks have reached their upper circuit during the day.
NSE, or BSE platforms, allow you to filter results by price, sector, or trading volume. This saves time and enables you to concentrate only on active and quality stocks rather than on random movers in the market.
The process of inspecting these screeners on a daily basis creates consistency, which helps in the early identification of valid trading opportunities.
2. Set Price and Volume Alerts
Price and volume alerts allow you to act quickly when a stock becomes one of the top gainers stocks.
Select a target price or a rapid-volume-increase threshold. You receive an alert when the share price reaches that amount or the volume exceeds your established target.
This ensures that you can go through it within a short time rather than being constantly on the screen.
3. Study Volume and Delivery Data
The volume and delivery information will give you an idea of whether buying interest is real or only a speculative move.
High trading volume with a strong delivery percentage is often an indication that investors are holding their investments, not trading on a day-to-day basis. When the volume increases and delivery remains low, it is an indicator of intraday activity.
Comparing the two regularly assists you in determining the real strength behind an upper circuit move and dodging deceptive market indicators.
4. Track News and Announcements
Stocks usually encounter upper circuits following new updates such as earnings, board meetings, or government approvals.
By monitoring filings by industry companies, investor presentations, and news headlines, you can figure out the cause of a sudden spike. These are trackable on exchange websites or financial news apps.
Being informed about the news would assist you in not reacting emotionally and provide you with an improved insight into whether the movement is well-grounded or a temporary measure.
5. Confirm with Technical Charts
Alternatively, prior to taking action on any upper circuit circuit, check its chart and seek indications such as strong breakout candles, increasing volumes, or higher highs.
Momentum indicators such as RSI or moving averages will show whether it is real momentum or just a short-term spike. This helps to prevent emotional trades and bring clarity in the entry or exit.
Never make a decision without using chart signals with news or data. It builds better confidence.
6. Keep a Daily Watchlist
Make a simple daily list of stocks that often tend to reach upper circuits. Keep a track of price, volume, delivery percentage and recent news concerning them.
This practice will assist you in noticing trends as time progresses and knowing which market movements are genuine. You may employ Excel, Google Sheets, or any simple tracker.
Checking it every day keeps you on alert, engaged, and prepared to take action on strong trends rather than just pursue irrational price surges without basis or logic.
Conclusion
Tracking upper-circuit stocks takes discipline and awareness. Market participants can use the above-mentioned strategies to track and capitalise on the upper circuit stocks.
These actions will assist you in identifying true momentum instead of hype-chasing and will help in making informed investment choices.
