Two questions...

This is a discussion on Two questions... within the General Trading Chat forums, part of the Reception category; 1. I was wondering why some stocks move in a certain way for example FSLR which has its big moves. ...

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Old Mar 25, 2012, 12:37pm   #1
Joined Nov 2011
Two questions...

1. I was wondering why some stocks move in a certain way for example FSLR
which has its big moves.
What exactly creates the charecter of the stock that makes it move a certain way?

2. Why do people buy and sell a stock according to the s&p500 and why
sometimes a stock doesn't move like the s&p?

Roi
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Old Mar 25, 2012, 9:31pm   #2
Joined Jan 2012
Re: Two questions...

Those are very general questions.
1. Stocks move due to many different reasons - earnings announcements, company events, market news etc. It is all based on demand and supply for that stock.
2. People do not buy and sell according to the S&P500. Generally, stock moves with the market, but market movement is just one of the many factors that determines stock price direction.
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Old Mar 26, 2012, 8:20am   #3
Joined Nov 2011
Re: Two questions...

rg12 started this thread But these stocks with certain charecter like FSLR GMCR etc...
always move like they move and im not talking about news and earnings etc..
They always move in their special way compared to other stocks...

I know that the market isn't the only thing that moves the stocks but i don't
understand why people see the s&p going up and say "ok, look for longs now"
I know it's right to do this but why does it happen?
And why certain stocks don't move like the market, like they totally ignore it...
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Old Mar 26, 2012, 8:37am   #4
Joined Nov 2009
Re: Two questions...

Quote:
Originally Posted by rg12 View Post
But these stocks with certain charecter like FSLR GMCR etc...
always move like they move and im not talking about news and earnings etc..
They always move in their special way compared to other stocks...

I know that the market isn't the only thing that moves the stocks but i don't
understand why people see the s&p going up and say "ok, look for longs now"
I know it's right to do this but why does it happen?
And why certain stocks don't move like the market, like they totally ignore it...
It's all about liquidity - a small illiquid stock will move much more sharply than a more liquid blue chip - for example if you have a stock with average daily volume of 100,000 shares - 1 person buying 50,000 shares will have a disproportional impact on that stock pushing it much higher as there are not many sellers - if a blue chip stock normally trades 3 mil shares a day an order to buy 50,000 shares will not really move it at all. If the S&P is moving higher that is normally an indication that funds are moving into equities generally so traders will get themselves long stocks with the view that the market will continue to rise.
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