Are these fluctuations normal?

anubis · 1 Are these fluctuations normal? Mon Jan 30, 2012 3:22 pm

anubis

Senior Manager - Equity Analytics

Posts : 474
Equity Stars : 5387
Reputation : 31
Join date : 2011-03-21

I'm bit new to the market. I have a question for those investors who have been in CSE for a long time (since before the big boom). Nowadays we can see the market up or down by 50 points or so (for most days of the month), is this the usual CSE? Is it usual for any stock market to fluctuate like this?

I was expecting the market to settle down after the bear run and start a steady growth, but instead it's going all over the place... scratch

Thanks in advance Cool

Cheers!

bullrun · 2 Re: Are these fluctuations normal? Mon Jan 30, 2012 4:11 pm

bullrun

Assistant Vice President - Equity Analytics

Posts : 780
Equity Stars : 5896
Reputation : 78
Join date : 2011-01-31

Yes, of course, you can't expect ups or down continuously. Ups and downs are there. There are certain situation where market will go up continuously or down continuously. Study well.

sriranga · 3 Re: Are these fluctuations normal? Mon Jan 30, 2012 4:18 pm

sriranga

Co-Admin

Posts : 6822
Equity Stars : 23026
Reputation : 2855
Join date : 2011-02-01
Location : London

Please read the following article which I read some times back.
(May be helpful)

Not sure what keeps the share prices changing on daily basis? These are the reasons why.

Demand and Supply
In stock market, the stock price will fall if number of sellers is greater than the number of buyers. On the other hand, if there are more investors want to buy the stock than the number of sellers who are willing to sell their holdings, the price will increase. This is just a typical example of demand and supply curve. The next question would be what will drive the demand and supply?

Market Psychological Effect
Demand and supply of the available shares to be traded is principally due to market sentiment. Whenever investors and traders feel the stock is not able to meet their expectation, they will sell their equities as soon as possible. Whereas, if they are optimistic of the future growth, they will be buying more shares of that stocks. But, what cause the market to change?

Unfortunately, there is no single answer to that question.
However, the most obvious factors include inflation, interest rates, energy prices, quarterly earnings reports, news on corporate events, war and terrorism, crime and fraudulent as well as political instability. Remember, when it comes to market sentiment, media plays the major roles. To make the news popular and gain most viewers, good things can be interpreted as bad actions sometimes. So, filter the information very carefully and do not let media influence your investment decision.

Individual Investor Needs
This is the most difficult one to detect but is the main reason why stock prices fluctuate daily. Look, every now and then, investors who buy the stock have pre-determined price to sell even before they purchase the shares. As a result, even if everything remains the same, the share prices may fluctuate due to their activities. Moreover, seasoned investors have trading tools to detect when they should buy or sell for maximum profits but minimum risks. You can also take advantage of the daily price fluctuation if you understand how technical analysis works.
Source: http://ezinearticles.com

anubis · 4 Re: Are these fluctuations normal? Mon Jan 30, 2012 4:24 pm

anubis

Senior Manager - Equity Analytics

Posts : 474
Equity Stars : 5387
Reputation : 31
Join date : 2011-03-21

@sriranga: Thanks! Smile

2011_NewComer · 5 Re: Are these fluctuations normal? Mon Jan 30, 2012 5:00 pm

2011_NewComer

Senior Manager - Equity Analytics

Posts : 559
Equity Stars : 5555
Reputation : 77
Join date : 2011-03-10
Location : Colombo

anubis wrote:I'm bit new to the market. I have a question for those investors who have been in CSE for a long time (since before the big boom). Nowadays we can see the market up or down by 50 points or so (for most days of the month), is this the usual CSE? Is it usual for any stock market to fluctuate like this?

I was expecting the market to settle down after the bear run and start a steady growth, but instead it's going all over the place...

Thanks in advance

Cheers!

I was also wondering about this..Using http://www.slstock.com/ you can see how the indices have changed over time.

This is how it has been in around 2009

Are these fluctuations normal? Asi10

sriranga · 6 Re: Are these fluctuations normal? Mon Jan 30, 2012 5:29 pm

sriranga

Co-Admin

Posts : 6822
Equity Stars : 23026
Reputation : 2855
Join date : 2011-02-01
Location : London

Thanks 2011_Newcomer.

Please find last 5 years Index fluctuation with 50-day MA and 200-day MA.
Source: yahoo
Are these fluctuations normal? Captur22