What Makes a Stock Go UP or DOWN
What Makes a Stock go up ?
Great Question, I’m glad that you asked.
A stock will move based on the supply and demand.
Usually when companies release great news / financials, investors will see a higher value for the company. When investors are willing to pay a higher price for the company/stock, this results to their stock price to go up.
Think of it like SUPPLY AND DEMAND
Keep in mind to always look at the MARKET VALUE
The “market value” represents the value of a company. You may also see the term “market capitalization” or “market cap” which means the same thing.
Being aware of the market value can even help with daytrading as well. If a company reports some type of good news or financials that brings new value in the company then you can look at the companies current market value to give you a idea of how much upside is ahead. For example if a company releases good news that sounds good but brings zero value or potential value for the future, then don’t expect investors to get excited.
What Makes a Stock Go Down ?
When a company releases BAD NEWS
Negative catalysts can range anywhere from poor financial results, weak guidance for future financials, analyst downgrades, bankruptcy, negative clinical trial results, poor management decisions and any thing else you can think of that would put a negative outlook on a company and its financials.
This normally causes a negative impact on the stock price.
When investors see the a negative outlook on the company they will typically will sell their shares to possibly invest in a different company.
When there are more sellers than buyers this can be a problem. This causes sellers to compete against each other and forces one of the sellers to sell at a lower price in order to sell before the other sellers. So, if there are more people selling the stock and in larger quantities then the stock will be going downhill. This results into a bunch of people rushing to sell their shares fist before the price goes down more.
If you own stocks then you should always follow up with the company to help you figure out whether which direction the stock ay be heading. Be sure to check the company’s news, and SEC filings, financials.
What makes a stock go up or down
- Chapter I. Stock Market Concept
- Chapter II. How to Buy Stocks
- Chapter III. How to Read Stock Quotes
- Chapter IV. What Makes a Stock go UP or DOWN
- Chapter V. Buy / Sell Order Types
- Chapter VI. How to read Level II Quotes
- Chapter VI. Rules for Daytrading Pennystocks
- Chapter VII. How to Read Stock Charts