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.
Share Market tips: In older times, most middle-class people flocked to banks to invest their money in fixed deposits or recurring deposits as they were considered trusted sources of investment. Since financial knowledge as well as inflation rates were low, such investments sufficed the needs of the people back then.
However, recent times have seen a surge in both the levels of financial knowledge as well as the inflation rates of economies, thus, most people have switched to investing in the non-classic fields.
To become a successful investor or make a new move in the share market, it is crucial to analyse some factors before the market opens. If trading strategies are decoded properly and investment rules followed, the market can give a return that can easily beat what FDs, RDs, and other traditional forms of investment yield.
According to Palka A Chopra, senior vice president, Master Capital Services, most people do experiments by trying their hands on the stock market. But people without proper knowledge suffer losses and quit the space. Therefore, it is important to minutely study the trends and movements to stay invested for long to reap good returns.
"Since the stock market is a continuously changing market and seemingly insignificant incidents can spell out substantial changes in the stock market, it is critical for the investor to always stay on top of all trends and happenings to become and remain a successful investor," Chopra said.
Things to watch before the market opens:
Is the market trading or trending: One should be aware 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.
Global markets: One should analyse how the global markets have been behaving prior to the market open as this may provide some important clues on how the 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.
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.
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.
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 a lot of interest in the stock which might be good for the price of the stock in the near term.
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 indicate a trend in the stock.
National and international news: There is a strong correlation between news and the stock market. A good source of getting information about the latest events and announcements is to read news, both national and global, regularly. One can find specific news pertaining to factors that influence the market on online and offline news portals.
Government policies: Government policies regulate the way the country and its economy work. Any given modification of a policy or the introduction of a new government policy can spell out a positive or negative change in the performance of a business. If the industry in which the business operates is favored by the new change, it may enhance the operations and profits of the business. However, the result may head in the opposite direction if the industry is negatively impacted. Therefore, one must keep up with all new government policies and expected changes. To better understand what a particular policy could mean for their investment, one can consult their broker.
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