How to use the New Retail Interest scanner?
This scanner gives you a list of Indian stocks where retail investors have increasing their stakes in the previous quarter.
Let’s learn more about who ‘retail investors’ are and the filters used in this scanner.
Retail Investors
Retail investors are individual, non-professional investors who buy and sell securities, mutual funds, or ETFs for their personal accounts, rather than for an organization. They typically trade in smaller amounts compared to institutional investors and make decisions based on personal financial goals, often using online trading platforms or brokerage firms.
Why the stock may have reached its peak…
Stocks often start falling when retail investors increase their stake because retail investors tend to have a herd mentality, these investors typically buy after significant price run-ups, drawn by recent performance or hype. Meanwhile, institutional investors (FIIs and DIIs), who have deeper insights and resources, might start selling to lock in profits or due to perceived overvaluation, creating downward pressure. This dynamic can mean that retail investors are entering as the stock’s peak nears, often resulting in a decline.
Using this logic, we have obtained a list of large and mid-cap Indian stocks where retail investors have increased their stake in the last quarter, indicating the chance of declining the stock’s value.
Example Trade
Scanner identified a rise in retail investor stake in Talbros Auto Ltd. on 1st Jan 2024 and the stock started falling as these investors typically buy after significant price run-ups, drawn by recent performance or hype.
Don’t forget
- This is a first-level filter aimed to give you a good starting point in your search for the lists of Indian stocks showing increasing retail investors’ interest. You need to analyze the valuation, financial strength, and management quality among other aspects to ascertain if they are good businesses and command a seat in your investing portfolio.
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How to Invest for Long Term
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Frequently Asked Questions
Should I just sell/short every stock where number of retail investors have increased?
No! This scanner is just to be used for idea generation. As mentioned in the ‘Don’t Forget’ section, this is just a first-level filter aimed to give you a watchlist of retailer-favourite stocks. It is not necessary that all of these stocks will see a downtrend. Other aspects need to be looked at before taking a decision. You can learn more about long term investing in Mr. Arvind Kothari’s How to Pick Stocks for Long Term course on Upsurge.club.
How can I learn more about investing in the right stocks?
Upsurge.club offers a range of courses on investing where you can learn everything from the basics to advanced strategies and idea generation methods. You can find them here.