குறைந்த விலையில் வாங்கி அதிக விலையில் விற்க முடியுமா /oversold stock வாங...

                                                         STOCK MARKEET SENTIMENT                  24.09.2020

majority of the people stock market trading and investment is high risk, in additional, which manipulated by large institutions. however, it is partially true, reality say different story. stock market fluctuation and directions are also determined market mind set. that is called as market behaviour. All kind of financial market, market participants who expectation and disappointment will decide the market direction. 

As a clear definition is sentiments are driving the market, in terms of the stock market up and down all the time. but identification of overall market trend would give higher return. because stock market correction and bear market rally is inevitable. Generally, macro factors would create positive or negative sentiments amongst the market participants. when evaluate the overall market sentiment, which core factors or fundamental news are conducting right now, because,  any one specific thing or macro factor will be push forward or pull down the broader market.  so, first market participants need to find what things are influence on market. 

macro factor such as, GDP data, inflation, RBI policy and liquidity which those are highly impact on stock market. you should figure out what is the market expectation ? if market is considered as negative news of upfront news or data that means, overall market trend is weak. around that period, market participants may tend to make short position on weak sector. 

As well as, if market is expecting good news in upcoming events, the investor sentiment would turn to negative path. in conclusion, macro data's and of its expectation will influence on security price.

                                                        SECTOR ROTATION.

When market move up broader market, all sectors move up along with broader, however some sectors are surging more than other sectors. likewise, all sectors are  do outstanding performance in the certain situation, but another time another one sector perform well this is called that sector rotation.

market sentiment and technical level of sector and whole market price action is working behind evolving of sector perform. in technical terms, support and resistance play the key role for market fluctuation. typically, market participants accumulate stock at support level, as well as, they profit booking or sell the equity on resistance level.  These market short term trend changes also being significant reason to sector rotation. in addition, cyclical and Non-cyclical stocks and of that beta also make sector rotation. 

                                                        STOCK BETA

Usually, cyclical stock move fast rather than non-cyclical stocks because cyclical stocks Automobile, construction, metal &mining which those are more sensitive due to which industry would grow well in economic peak as well as drop down their sales in economic contraction. so, these stock price would change more fast than broader market. by this reason, when market reach new high, high beta stocks will give huge return in short-term. on the other side, if broader market while break below the crucial support High beta stock fall down so fast. 

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Non-cyclical stocks such as, FMCG, IT, and Pharma stocks are called non-cyclical, because these industries would not affected much more in economic down turn. they would get constant revenue and profit. commonly, which stocks are being low volatile so that would be low down side risk. this stocks will give low return in strong bull market rather than cyclical stocks. on ther hand, broader market while being uncertainty which stocks price move upward strongly. The experience traders track the market direction, if who consider market is losing their buying power or market is getting weaken trend as soon as they switch over to low beta stocks. because Non-cyclical stocks grow constantly and provide dividend consistently to investor . that's why investors prefer to buy  in the uncertainty circumstance. 

if stock market break out the strong resistance zone, cyclical stock would perform well. likely that, sometime, market move neither side, in this situation, traders can not take solid decision, so they tend to buy non-cyclical stocks for reduce their trading risk. Apart from that, macro data news govt reforms and specific industry business environment, which aspects should be analysed deeply.