First Question arises when Buying Stocks in India is “How do I pick the right stock?” – If you’re new to investing, this question must be on your mind. And honestly, it’s the most important one to answer. Because no matter how much you study charts or follow market trends, everything boils down to choosing the right stock. Get this right, and you’re halfway to making good returns.
I’ve spent the last two years watching the market, testing strategies, and sharing what works (and what doesn’t) with fellow investors. Today, I want to break it down for you in plain, simple terms—how to pick stocks in India, whether you’re trading for quick gains or investing for years.
It doesn’t matter if you’re looking to make fast money or build wealth slowly—you can’t just pick any stock and hope for the best. You need a plan. So let’s talk about what really matters when buying stocks.
1. First, Know Your Purpose
Before you even start looking at stocks, ask yourself a basic question: Why am I investing?
- Are you looking for short-term profits (like intraday)?
- Do you want to hold for a few days or weeks (swing trading)?
- Or are you planning for long-term wealth creation?
The answer will change how you select a stock. A stock perfect for intraday may not be great for long-term. And vice versa. So always match the stock type with your goal.
2. Stock Selection Formula for Beginners
There’s no one magic formula, but after studying hundreds of stocks, I’ve seen a pattern. A good stock usually has:
- A strong and trusted company behind it
- Good quarterly and yearly results
- Low debt and steady profits
- Positive news and growing demand in the industry
- Price charts that show upward movement or breakout signals
You can follow this simple formula to filter the stocks before buying.
3. How to Do Stock Selection for Intraday Trading
You buy and sell a stock within the same trading day – that’s the whole game. And since you’re not holding overnight, two things become super important: speed and timing.
Now, not every stock works for this. The ones that do usually have three key qualities:
- Good trading volume (Liquid): You want stocks that lots of people are actively buying and selling. If hardly anyone’s trading it, you might get stuck unable to exit when you want.
- Price movement (Volatile): Flat, sleepy stocks won’t help you. You need stocks that move enough during the day to create profit opportunities. No movement = no chance to make money.
- In momentum (Trending): Stocks making news, breaking important price levels, or showing clear patterns tend to keep moving in one direction – that’s what you want to ride.
How to find these stocks?
- Check the NSE’s top gainers/losers list – these are usually active
- Look for sudden volume spikes (shows fresh interest)
- Keep an eye on stocks reacting to big news
Most trading platforms (Zerodha, Upstox, TradingView etc.) have built-in scanners that filter stocks based on these exact criteria. A quick scan at market open can give you solid intraday candidates.
4. Top 10 Intraday Stocks Today
While the list changes every day, here are some stocks that are commonly active in intraday trading:
- Reliance Industries
- HDFC Bank
- ICICI Bank
- Tata Motors
- Infosys
- Larsen & Toubro (L&T)
- SBI
- Maruti Suzuki
- Axis Bank
- Adani Enterprises
These stocks often have high volumes and price movement. But always do your own check before trading.
5. How to Select Stocks for Intraday in NSE?
To pick stocks for intraday trading on NSE, follow these simple steps:
1. Check Pre-Market Data: Between 9:00 to 9:15 AM, look at which stocks are moving based on volume and news.
2. Look at Market Opening: From 9:15 to 9:30 AM, observe how the market is reacting. Is it bullish, bearish, or flat?
3. Use Intraday Chart Patterns: Look at 5-minute or 15-minute charts to find breakout levels or reversals.
4. Stick to 1 or 2 Stocks: Don’t try to trade too many stocks at once. It will confuse you. Master one stock at a time.
5. Follow the Trend: Never go against the market direction. If the stock is rising and has good volume, go for buy trades.
6. How to Do Stock Selection for Swing Trading
Swing trading is for people who want to hold stocks for a few days or weeks. It’s less stressful than intraday and gives time to plan. For swing trading, pick stocks that:
- Are in an uptrend
- Have recently broken a resistance level
- Have good fundamentals
- Are supported by strong volume
You can find these stocks using filters like “52-week breakout,” “moving average crossover,” or “bullish chart pattern.”
Stocks like Tata Elxsi, Bajaj Finance, or Persistent Systems have shown good swing opportunities in recent months.
7. Must Check These Things For Long-Term Investing
For long-term, you need to look beyond charts. Look at the company’s health. Here’s what to check:
- Profit Growth: Is the company making more profit each year?
- Debt Level: Companies with low or no debt are safer for long term.
- Management: Good leadership plays a huge role in future growth.
- Industry Trend: Make sure the sector is growing and not fading out.
- Dividend History: Companies that pay dividends regularly are usually stable.
Companies like Infosys, TCS, HDFC Bank, and Asian Paints have been long-term wealth creators for investors.
8. What to Avoid When Buying Stocks in India
When buying any stock, avoid these:
- Stocks with poor results but sudden price rise (could be a trap)
- Stocks with low trading volume
- Stocks hitting upper or lower circuit often
- Stocks with recent fraud or controversy news
These are signs that something is not right. Stay away unless you’ve done full research.
9. Tools That Can Help to Decide Stocks
Here are some simple and free tools you can use:
- Moneycontrol and Screener.in – To check company financials
- TradingView – For chart analysis
- NSE India Website – For latest news, top gainers/losers, and volumes
- StockEdge App – For quick scans and technical ideas
Use these regularly to build your understanding.
FAQs on Stock Selection
What is the 3 5 7 rule in stocks?
The 3 5 7 rule in stocks is a risk management strategy. It means never putting more than 3% of your capital in one trade, 5% in one sector, or 7% in all trades at once. This helps reduce risk and protect your portfolio from big losses.
How to determine if stock is good buy?
To determine if a stock is a good buy:
Strong Fundamentals – Check revenue, earnings growth, and low debt.
Reasonable Valuation – Look at P/E ratio, P/B ratio, and compare to industry.
Competitive Advantage – Does the company have a unique edge?
Healthy Industry Trends – Is the sector growing?
Positive Management & Financials – Strong leadership and cash flow.
Future Growth Potential – New markets, innovation, or expansion.
Dividends (if applicable) – Consistent payouts for income stocks.
Do research (or use analyst reports) and consider long-term potential.
What is the best thing to look at when buying stocks?
The most important thing to look at when buying stocks is the company’s fundamentals, especially:
Earnings Growth – Consistent and rising profits indicate a healthy business.
Revenue Trends – Growing sales show demand for products/services.
Profit Margins – High or improving margins mean efficient operations.
Strong Balance Sheet – Low debt and good cash reserves reduce risk.
Valuation (P/E, P/B, PEG ratios) – Avoid overpaying; compare to peers.
What is a good PE ratio?
Ideal P/E Ratio is :
Value Stocks: 10-15 (mature companies with steady earnings)
Growth Stocks: 15-25 (companies with consistent expansion)
High-Growth Stocks: 25-40+ (only justified if earnings grow 25%+ annually)
Key Checks:
✓ Compare to industry peers
✓ Verify earnings growth matches P/E
✓ Review historical P/E trends
Example: A P/E of 30 is expensive for a bank but reasonable for a fast-growing tech firm. Always analyze P/E with other fundamentals.
Conclusion
As someone who has been writing about finance for the past two years, I always say one thing: Don’t just buy any stock. Buy the right stock for your goal.
The share market is full of opportunities, but it rewards only those who study, plan, and stay disciplined. Whether you’re doing intraday, swing, or long-term investing, your success depends on your stock selection.
Don’t follow random tips from social media. Take your time. Understand the company. Learn the patterns. And invest smartly.
If you apply these simple tips and avoid common mistakes, you will see the difference in your results.
