Intraday Fade: Overextended Large Caps
The short-only mirror of mean reversion. Shorts Nifty 100 names trading more than two standard deviations ABOVE their own 40-day average at the open, and covers before the close. No position is ever held overnight.
Why this is expected to work
Short-horizon reversal runs in both directions: extreme recent winners give back as reliably as extreme losers bounce, and the mechanism is the same — someone paying for immediacy, here a buyer chasing. The upside version is harder to trade and that is exactly why it persists. It is also why this template is intraday, and the design is driven by Indian market structure rather than preference. A retail cash-market account in India cannot carry a short position overnight; shorts must be squared off the same session unless routed through Stock Lending and Borrowing, which is thin and expensive outside the largest names. A backtest that shorts a stock for three weeks is modelling a trade most users cannot place. Squaring off intraday makes the strategy something an ordinary account can actually do. Be sceptical of the result: shorting into strength has an unbounded loss profile, the win rate is modest, and the strategy is structurally on the wrong side of a melt-up.
How the pipeline works
NIFTY100 constituent
Keeps rows where nifty100_member == 1
nifty100_member == 1 Liquid: traded > Rs 25 cr/day
Keeps rows where turnover > 250000000
turnover > 250000000 Stretched 2 sigma ABOVE its 40-day mean
Keeps names 2 sigma above their own 40-day average
10 most overextended
Selects the top 10 by overextension
What this template teaches
- direction='short' — the sign applied before sizing
- RelativeValueRule direction='above' (the upside tail)
- Intraday square-off as the honest answer to a market constraint
- Why short templates must respect what a retail account can place
Short Selling in India: What a Retail Account Can Actually Do
You cannot carry a cash-market short overnight. That single rule determines the shape of every short strategy a retail Indian investor can realistically run — and most backtests ignore it.
Related strategy templates
Find the right starting point for your next trading thesis.
Blank Canvas
An empty pipeline on the NSE equity universe with monthly rebalancing and equal weighting. Nothing is screened or ranked — start here when you want to build the whole thesis yourself.
View detailsLow Volatility 30
Holds the 30 calmest large- and mid-caps by realised annualised volatility, sized inversely to that volatility so the quietest names carry the most capital. The construction NSE uses for its Nifty100 Low Volatility 30 index, on the exchange's own published volatility series.
View detailsWatchlist: Select Monthly, Re-Risk Weekly
Two schedules on one canvas. Once a month it picks the eight strongest names from a fixed twelve-stock watchlist; every week it re-sizes what it already holds to equal risk contribution without changing the constituents. Costed against Zerodha's real charge stack, with an in-app alert on every order.
View details