Well…there are few things that one can track …
a) Which sectors are in favor – one can tack sectoral indexes. For example , Power, Infra, Railways, PSU, PSU banks , MidCap IT ,Water pipes are the leaders of current rally …most the economy facing sectors. You can make watchlist of all the sectors and see which are moving up , at a speed.
Once you identify a trending sector, then you have to find a good stock based on the following ( apart from having strong fundamnetals)
b) Relative strentgth of the stock-price vs Index – for Mid Cap company ,one can use Mid Cap index. See whether your stock is moving faster than the index ( above 0 line) .For Nifty 50 company, one can put Nifty 50 in relative strength index.
c) RSI – Ideally one should prefer a stock where RSI is above 60 on all the time frames.
Hope this helps.
Here is a chart for a PSU company…where we have shown all the mentioned indicators so that the readers can understand the concept very well…
Hope this is helpful.
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