Like any other field, stock markets also move in a particular cycle of events based on the law of Demand and Supply
. Investment pattern somewhat works on the principle of Every Action Has an Equal and Opposite Reaction. The action taken by one is reacted by another and so on.
The company requires capital to expand. So when it undertakes any project, it requires finance to carry out the same. The promoters at the first step start accumulating wherein they themselves start investing their own money in the company. This results in the share price manipulation to some extent. The share prices start rising gradually keeping the volumes intact. This may sometimes result in insider trading also.
The hard core investors and both fundamental and technical analysts get the clue about such events in the company. The fundamentalists can guess this by a change in the companys shareholding pattern and technical analysts by the rising share prices and consolidating volumes. As a result they start investing in the company for themselves or on behalf of the clients. These are the select few people in the stock markets.
Sooner, the share prices rise with the rising volumes and this is the stage where information becomes news. Its a breakout stage where we experience a mass participation into the same stock. Every trading session we can see increased participation.
A time comes where, the promoters are likely to get their prices back and they start distributing their own shares to the general public. Now this is the phase of a high stock price volatility where the mass is still buying and the promoters are selling off their stake. In technical terms this phase develops a Doji pattern (a single candlestick pattern) where the prices end up making a sign similar to a + sign which denotes that the stock has made drastic highs and lows and ultimately closed nearer to where it opened.
The analysts get the selling signal and as a result they start selling off gradually. Ultimately seeing the prices falling, there is a panic selling by the mass and prices again fall down to its likely normal stage. Generally it is observed that it takes more time for the stock prices to rise and a least time to fall (if we compare it with the gravitational force.)
This cycle is generally followed in the stock markets except for some unlikely news or events that may take place in the economy.
For More Updates Visit http://www.niveza.in/
by: Niveza Investor Exchange
#
2
Zaproxy alias impedit expedita quisquam pariatur exercitationem. Nemo rerum eveniet dolores rem quia dignissimos.
2024-12-4 15:31
reply