How to Predict Stock Market Direction

Understand How to Predict Stock Market Direction if a Stock will Go Up or Down.

Understand How to Predict Stock Market Direction if a Stock will Go Up or Down. How to use Options Data to Predict Stock Market Direction and Trend.

How to Predict Stock Market Direction and Trend

Understanding the stock market direction and trend is not that difficult if you follow some of the basic rules. Check out the charts on your online share trading website or on e-broking websites. Make note of price and volume changes. Stocks will show selling signals.

1. If the market is constantly falling, sell off your worst performing stocks first.
2. If the stock market continues to fall, sell more of your poor performing stocks. Wait for few days and keep an eye on the market.
3. If situation doesn’t turns around, consider selling all your stocks.
4. If any of your stocks fall below 10% of your buy price, sell it immediately.
5. If you have done good Fundamental Analysis of a Company and the stock, you can stick to it and wait for the market to recover.

Learn:

• Stock Market Trends and Signal – How to Understand
• Right Time to Buy Stocks
• Share Trading Mistakes to Avoid

How to use Options Data to Predict Stock Market Direction

Options data show high volatility in a very short period of time. This data can provide useful insights about security movement. Most Intraday Traders and Long-Term Experienced investors in Stock Market often use these data for short-term Intraday Share Trading and even for Long-term investment.

Here is How to use Options Data to Predict Stock Market Direction:

1. Watch Volume of Trade: Look for call (Right to Sell) or put (Right to Buy) options with current volume. Is the Current Volume Greater or Less than Average Daily Trading Volume?
2. Compare Open Interest: If Today’s Volume exceeds Yesterday’s Open Interest then it indicated Mew Positions.

Recovery of Stock Market After Downfall

Every stock market will try to recover after a prolonged downfall and try to rally from low levels. Don’t hurry with small rise in a couple of days. It is too early to say that the market has recovered. Don’t rush to buy too early. Wait and watch for at least 10 to 15 days to confirm if a new upward trend has started.

With a new upward rally, stocks from leading sectors will recover first and other sectors and stocks will follow. So, focus on stocks of leading sectors. Invest in these stocks on first or second base and sell off and book profit on third base. Don’t wait for the stock to increase further and form a fourth base. This can be too risky and the stock may start falling.

Check:

• Top 5 Reasons to Invest in Stocks
• How to invest in Foreign Stock Market

Conclusion

I hope now you know How to Predict Stock Market Direction. Please SHARE with others. Thanks!

Also Read:

• Why Invest in Textile Stocks in India?
• Investment Portfolio Management
• How to Buy Stocks at Bargain Price
• Share Market Crash – What to Do? Buy, Sell, Hold?
• Volatile Stocks – Should I Buy?
• How to Pick Best Stocks to Buy in India
• Best Investment Options for Senior Citizens
• Top 10 IT Companies in India by Market Cap
• Intraday Trading Tips and Strategies for Beginners
• Indian Economy GDP Growth Rate in 2022
• Stock Market Terminology for Beginners
• Top 10 Mobile Phone Brands in India
• Introduction to Stock Market in India
• How Stock Market Works?
• TSMC India
• What is Demat Account?
• How to Open Demat Account in India?
• Where to Open Demat Account Online in India?
• When to Invest in Stock Market
• Quality of Stocks Vs Quantity of Stocks
• How to Invest Like a Professional Expert?