Read The Signs Of Indian Stock Market With These Tips

Indian Stock market is highly fluctuating and it can be difficult for novice investors to read the sign and patterns of the stocks. Though predicting stock markets and equity markets are not easy but financial analysts use certain indicators and techniques to predict the movements in the market.
 
Following are a few fundamental indicators that help to predict the share market:

Take into the consideration the Interest Rates:

Fluctuation in interest rate can affect a companies’ stock. The traditional system is to invest in shares when the short term rates are low and sell them when the rates increase. Usually it is observed that short term rates are lower than long term rates because the latter involves uncertainty over the long term. But when the rates on short term investments are higher than the long term ones then it hints the expectancy of a possible recession in the market.

Insider Moves:

Though the name suggests otherwise all insider trading are not illegal. According to the law an insider is considered to be a director, top official or a share holder who owns 10% or more of the shares and has substantial idea regarding the price sensitive unpublished information of the company. An insider is free to sell or buy shares if the transaction crosses a certain limit then it is required to inform the stock exchange where the stock is listed. This transaction information is shown in the websites of the stock exchange and this will help you to make future predictions. For example if the insider buys the company’s share then the only reason is that he is bullish regarding share price of the company.

Here are some technical indicators:

Trading Volume:

Trading volume indicates the number of contracts or shares traded in the stock market. If the value of a particular share is increasing higher than the standard volume then it indicates that investors are hoping that the price of the share will further rise in the future. But a decrease in price indicates a downward trend.
 
Put-Call Ratio:

It the put-call ratio increases then it means that the number of put options traded is increasing. This either indicates that the investors think fear the market will fall or are hedging their portfolios as they expect a decline in the share prices.
 
The above indicators are usually used by experienced fund managers and analysts but can also be used by new investors.

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