STOCK MARKET OR STUCK MARKET...???

The market conditions are unstable yet so stable. There has been a huge movement in the share prices of various shares both positively as well as negatively making the market stable around 16500 since so many days.

The market has taken a leap from 13913 on 25^th May, 2009 to 16619 on 2^nd June, 2010 taking it 2700 points up with constant fluctuations. It has touched 17970 on 7^th April, 2010 on the peak whereas it has also touched 13589 on 26^th May, 2009 on its trough. The market was expected to move upwards after the drastic fall up to 8325.82 on 6^th March, 2009. It’s a cycle which repeats on its own. After reaching the peaks of 20827.45 on 11^th January, 2008 creating huge profits and liquidity in the market it crashed with heavy correction taking away all the wealth created.

The market basically works on the real estate cycle which has 5 year boom and 5 year burst and stagnation. The market remains stable and upwards till the time the real estate is in boom and crashes when there is a burst in the real estate market. Also, it heavily depends on the market operators who are masters in their business and turns the market as per their whims and fancies. One should not think of beating them in their business by playing opposite tricks as it will be of no use. One should walk the way the market operators are walking; if they are trying to push the market up by buying, one should buy whereas when they are trying to push the market down by selling, one should sell.

There are various other factors pulling the market which are internal to the company which help in changing the market demand and supply creating the change in the market conditions. Some of the factors include Mergers and Acquisitions which affected many companies including Tata Steel, Tata Motors, Bharti Airtel, etc. There is a trend in the market about the mergers and acquisitions which has created huge ups and downs in the market. Everyday there are mergers in some or the other sector like pharmaceutical, food and beverages, banking, etc.

Some other factors for market fluctuations includes frauds by the company, change in the company’s management, new rules and regulations by the government, etc.

There has been a huge positive movement in all the sectors since the beginning of the year 2010 giving hopes to the wholesale and retail investors in the market. There were also many IPO’s launched giving positive signs in the market and helping the market to stabilize or move positively.

The current situation is not suitable for the new investors to enter into the market but is very good for study. Everyday there are fluctuations which are huge and tough to understand for the new investors. One can wait and study the market and track its movement for better understanding. The time is correct for the short-sellers and intraday traders who can understand the market properly and predict its movement to make profits. If an individual has stock bought at lower price and is confident for profits, then he should hold it further till the time market stabilises and wait for the right time to sell. If he has generated enough profits out of its holdings then he might sell and not wait further as there might be a negative movement in the market decreasing his profits.

It will be advisable to analyse and understand the market and the stock prices of various shares in the market. This will help an individual to earn from the market positively and not incur losses. Such study will also bring in market sentiments and controls and also reduce the speculation game which makes the market a gambling place. If the prices move further below the expectations, one should buy that share and hold it till the right movement and sell the holdings if the prices move beyond expectations. Also, an investor should always create a target price and profitability from the market. Such practice will always protect the investor from heavy losses and safeguard his interests.