Factors To Keep In Mind For Investors Before The Market Opens
1)Take a decision on your Investment
Every investment decision is taken to earn some returns from it and investment in markets carries a risk associated with it. It is better to stay away from high-risk stocks that may gain for a few days due to some news. Thus an investment in such stocks could be a trap. If you rely on advice related to stocks from your associates that may not prove to be worthy, it is needed that you do some groundwork before buying them.
2)Basic Knowledge of Market
As the stock markets are usually volatile, some basic knowledge of Charts and technical indicators is required. A stock may be displaying weakness in shorter time frame but in a longer time frame, it may be strong. It is better to have a view on different time frames before making a decision to buy or sell.
3)Is the market Trading or Trending
One should know if the market is in consolidation or is in a trending mode. The trend may be up or down. This judgement is very important because many of the trading strategies are based on it.
One should analyse how the global markets have been behaving prior to the opening of markets as this may provide some important clues on how market may behave during the trading day. One can also analyse the ADR’s and that may indicate which particular sectors may perform or may decline.
5)FII & DII Data
Both FII & DII are the major players in the market. The broader market trends can be ascertained on the basis of their inflows and outflows.
6)52 Week highs and lows
These numbers are important as a stock which is fundamentally very strong can be bought near the 52 week low levels for a shorter to intermediate term whereas a breakout above the 52 Week high would help a trader to trade in that particular sector as next leg of rally may be due in those sectors/stocks.
7)Security wise delivery Positions
This is an important parameter to be considered before trading as many times there is a strong co-relation with delivery percentage and the price of the stock. For example – There may be many stocks that would show an increase in price along with an increase in delivery percentage. This can indicate that stronger hands are increasing their positions in the stock and it may move in the near term.
8)Bulk & Block deals
Day traders may consider the bulk and block deals data. Bulk deals happening in a stock on a continuous basis and if it is accompanied by higher volumes may give a clue that in future the stock price may appreciate.
9)Social Media and Blogs
The way people invest and the way public at large obtain news has been transformed by the internet. Therefore, if any expert disseminates a bullish or bearish idea about any stock, it can have a huge impact on the stock. Investors should keep a track on any potential market moving news but be careful to avoid the sites that give recommendations based on the stock they own.