Market Experts Tips On Predicting Stock Movement - Motilal Oswal
Market Experts Tips On Predicting Stock Movement - Motilal Oswal

Market Experts Tips On Predicting Stock Movement

Okay so, after looking to open a broking account online for a long time, you’ve finally taken the plunge and gotten yourself a brand new online broking account. All that remains for you to do right now is trade on the stock market. But since it’s your first time, you’re looking for some tips on how to predict stock market movements so that you get a kind of a headstart on things. If that’s your case, then you’re in luck. Here are some expert tips on stock movement prediction.

1. Watch out for large insider moves

An insider is basically an official of a listed company such as a director or a shareholder, who possesses a stake of 10 percent or more in the said company. In the current Indian setting, Insider trading is illegal if the trades are made based on unpublished price sensitive information.

However, insider trades are perfectly legal if the stock exchanges are informed prior to making the trades. You can find information on insider trades on stock exchange websites. If you see an insider buying the shares of a company in bulk, the chances of the share price going up are high. On the other hand, if the insider is offloading their stake, then there are chances for the stock to go down south.

2. Follow interest rate changes

When you’re conducting a share price movement analysis, always make sure to take the interest rate changes into account. If the RBI raises interest rates, borrowing tends to become more costlier, which can have a negative impact on stock market movements.

This is simply because of the fact that corporates tend to be huge borrowers of capital and a raise in the interest rates would mean more interest payments and lower profits. Alternatively, if the RBI decreases the interest rates, borrowing becomes cheaper, leading to a positive effect on share prices. 

3. Trading volume says a lot

How often do you take a look at the trading volume for a stock or an index? If your answer is sometimes or never, then you absolutely should start monitoring the trading volume since it allows you to make some accurate stock movement predictions. The trading volume combined with the current price trajectory can give you all sorts of information. Here’s how it works.

  • If there’s a huge spike in the trading volume and a corresponding increase in the price, then the stock price is highly likely to go up.
  • If there’s a fall in the trading volume with an increase in the price, there’s a chance for the stock price to go down in the future.  
  • If there’s a huge spike in the trading volume and a fall in the price, then the stock price is highly likely to go down.
  • If there’s a fall in the trading volume with a decrease in the price, there’s a chance for the stock price to go up in the future.  

Conclusion

When conducting a share price movement analysis, always account for uncertainties. The stock market can be unpredictable and may not always follow through. That said, with these three market experts’ tips, you can now confidently go ahead and put your online broking account to good use.  

 

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