Indian Case Study: Screening Nifty 500 Under ₹500 with SMA + RSI Rules

Let’s put everything together with a real example.

Imagine you want to find affordable stocks (under ₹500) in the Nifty 500, but only those showing technical signals of strength.

Two simple filters:

• Simple Moving Average (SMA): stock price above 200-day average → long-term uptrend.
• Relative Strength Index (RSI): between 40–60 → steady momentum, not overheated.

The Prompt (How to Ask AI)

Here’s a reusable screener prompt:

“From the Nifty 500, list companies with stock price under ₹500, currently trading above their 200-day SMA, and with RSI between 40 and 60. Return results in a table with columns: Stock, Price, 200-DMA, RSI.”

This ensures you only get stocks that are (a) affordable, (b) trending upward, and (c) not overbought.

Sample Output (Mock Example)

This shortlist narrows the Nifty 500 to a handful of candidates worth studying further.

Step-by-Step Workflow (How to Use It)

1. Run the Prompt: Copy-paste into your AI tool.
   
2. Refine if Needed: If you get too many results, tighten RSI to 45–55. If too few, loosen to 35–65.
   
3. Export Output: Ask AI to format the results in a table and paste into Google Sheets.
   
4. Add Conditional Formatting: Highlight RSI < 50 in green (mildly oversold), RSI > 55 in orange (nearing overbought).
   
5. Weekly Refresh: Run this prompt every Saturday evening to build a trend tracker.
   

Why This Screener Works

• Under ₹500 filter: Makes the list relevant for small-ticket investors.
• Above 200-DMA: Confirms long-term uptrend — you’re not catching falling knives.
• RSI 40–60: Ensures price action is healthy but not stretched. It’s simple, easy to repeat, and highly practical.

How to Backtest This Case

• Prompt: Backtest this screener on Nifty 500 data for 2018–2022. Show win rate vs Nifty 500 index.
• Compare average returns.
• If the screener outperforms the index in multiple market cycles, it’s a useful filter.

Final Takeaway

This case study shows how to blend price levels (₹500 cap) with technical signals (SMA + RSI) for a practical shortlist.

The real value comes from iteration: tweak RSI bands, adjust SMA periods, and track results over time.

With simple rules and consistent application, even a broad universe like Nifty 500 can shrink into a focused, research-ready list.