Shorting Candidates

How to select a scrip for shorting??
There are quite a few methods. One of the simplest ones I am sharing with you with example.
Step-1:
Select stocks with a Doji at top. For example yesterday EOD when I ran the scan for Doji at top, I got
among others, National Aluminium.

Step-2:
Change the time-frame to 75 minutes and see if there is a negative divergence vis-a-vis a momentum oscillator. The Oscillator of my choice is RSI. Among the stocks scanned in Step-1,I could notice National Aluminium showing negative divergence in 75 min chart:

This completes our homework,as far as stock-selection for shorting is concerned.
Now we shall look in detail about initiating the trade on the short side.
For first 5 minutes (at least--one may extend this time to 15 minutes also),one has not to do anything.
The new session may see the stock

1. Opening gap-down
2. Falling like a water-fall at the opening itself.

In both the above instances,we have not to do anything and treat it as a missed bus. But if the stock doesnot do any of the above,then we have to watch the price-action closely and derive at our entry and stop-level points judiciously.
Now, within an hour into the trading session,we saw weakness creeping in.
By this time, our trade set-up came to be like this:

However,price didnot breach our entry level and moved up instead so we changed our Entry and SL in following manner:

And we had our entry very soon:

And in Daily Charts,we appeared like this:

Wasn't that easy ??

Dealing With Gap-down

Gap-down
Gap downs are usually more terbulent than gap-ups and usually game is up very fast in the sense that the normal wait n watch period of 5/10/15 minutes is enough for the fall to complete its run and remaining of the day sees price wandering at around the lows made in these minutes only,giving very little chance (to short) again.
In fact, the gap-down days test one's patience more as one feels left out of action (that has occurred in first 5/10/15 minutes and this particular feeling of "having missed" leads one to get into short trades at inopportune moments, just to get whipsawed.

Broadly ,the instances that occur on gap-down day can be innumerated as below:

Instance -1:
Price opens gap down and keeps sliding down like a waterfall.

Instance-2:
Price opens gap down but then moves up to close the gap and then falls again.

Instance-3:
Price gaps down,moves up to close the gap,and keeps moving up.

Treating Instance-1 as missed bus, an Intra-day trader can always find means to find stocks which fall under remaining two instances by using a simple two step scan:
 Step-1: Price opened gap down
Step-2: Price crosses above high of the first 5/10/15 minutes candle

Today, the first 5 stocks that emerged on the basis of above scan were

One can use these points either to go long for gap-fill (which may appear contrarian) or wait for the gap to be filled and then look for opportunity to go long or short as the momentum builds up or fades. 

Dealing with Gap-up -1

Gap-Up:
With hindsight everyone views gap-ups like today as a huge opportunity to make money. but then the current negative environment makes it quite difficult to find points of entry where best RR can be located and instead of locating proper thresholds/logic for long-short entries, people start taking trades under the influence of sentiment/FOMO etc.-- basically ending the day overtrading and knee-jerk reacting.
This post is an attempt to show how noises can be cut and best entries can be located.
Let us try to innumerate the instances that are possible when a gap-up occurs:
Instance-1:
Gap-up
Open=High
Price sliding down but not closing the gap
Instance-2:
Gap-Up
Open=Low
Price slides down but O=L remains intact
Instance-3:
Gap-up
Price-wanders up/down
neither O=L nor O=H respected
but gap-up remains unclosed
For long trades, our key logic/condition/preference is that after 5/10/15 minutes (as per individual's comfort) the gap should remain unfilled.
And herein too, instance-2 wherein O=L is observed,should be the most preferred one. Also stocks from segments which are outperforming Nifty have to be preferred (currently FMCG & Pharma).
So, Lets see what FMCG stocks fulfilled following two conditions:
1.First 15 min candle didnot fill the gap (vis-a-vis last day's close)
2.High of first 15 min candle gets breached
So at 9.34am we had Britannia fulfilling the above condition.We had
Gap-up
Open=Low at 2640
First 15 min high at 2680 was breached.
So our trade set-up was:
Long with SL at 2640 and target RR=1/1.5/2
https://prnt.sc/ruuw78

Similarly, in Pharma sector we had Sunpharma
https://prnt.sc/ruux5a

By EOD these stocks had shown huge gains. But it depends upon the individual trader’s temperament/appetite/ability to play as per RR or TSL
Note: 
1.This is a simplified version of scanning and then trading a set-up. Participants are requested to fine-tune the concept further and build-upon it .
2.When the gap doesnot remain open,then it has to be dealt with differently.