INSUBCONTINENT EXCLUSIVE:
Though stock price movements look like random, these trends can be segregated by doing detailed analysis.
1
Why price moves in trendDespite best efforts of regulators, pricesensitive information still comes to stock market slowly
First, it reaches insiders, then to the circle close to them, then to analysts and big investors and finally to the general public
Since this transmission takes time (i.e
this can vary from few hours to several days), the price movement will also be slow
In several cases, the news may be fully priced in before it hits the market and that explains the muted price action despite big news like
jump/fall in net profit, etc hitting the market.
2
What are these trendsThese are uptrend, downtrend and sideways trend
Sideways trend occurs when the market is indecisive
Uptrend occurs when positive news comes to the market slowly and downtrend occurs when negative news comes to the market
If you can spot the emerging trend for a stock right at the beginning, you can make money by participating in an uptrend or downtrend
without even knowing the fundamental reasons behind it.
3
How to spot trendsThe best way to spot an emerging trend is to study the historical price patterns and compare it with the current ones
Since people usually react in a similar fashion when faced with similar situations, the price patterns generated in the past get repeated in
