I have seen stocks’ price rise but without any significant delivery volume. Lets take Happiest Minds. The stock is on fire but if one sees delivery volume there is not much. Why is it so.? Can day traders alone make a stock’s price rise?
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Not only retail traders trade intraday but big institutions also trade intraday day…
Now,
As the price is increasing, but there is no significant rise in volume/delivery volume. Its means only retailers (weak money) is participating, no Smart money is participating.
So the buying pressure is only created by retail traders.
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Rising price, little to no volume is not good. Who knows, could be a pump & dump!
But in many cases there are huge trading volumes but deliver is minuscule. even if there is huge day trading someone has to be left holding the stocks at high prices. lets say 1000 is trading volume n considering 20% delivery, those 200 stocks will not be sufficient to give rise to huge price appreciation. shares where delivery is very high no huge rise or fall is seen. examples are ITC vs HappiestMinds.
does it mean that someone is artificially inflating the price so that they can dump those shares
Everything which is happening in the stock is reflected in price (price action) and volume.
So, you have to look it in the context of buying and selling pressure.
Price will only increase when there is a buying pressure means buyers are aggressive and they are buying at higher prices.
Now those buyers who took the trade for holding or delivery purposes their volumes will be concidered as delivery volume. And those buyers who took the trade for intraday basis, at the end end of day they will squareoff their positions.
And don’t just look at the individual day delivery volume…try to compare it with the previous days delivery volumes.
sorry for the delay but i would like you to explain me the following:
:- now if delivery % is low means intra-day play was greater. now an intraday player will buy or sell with the intention of squaring off at the end of day. can intraday players influence the price?
it is seen there is price rise even without significant delivery %, then who is creating the demand. bcoz intraday players will square-off at the end of the day.
Price rises when people are willing to buy at higher prices, high Volume dosen’t necesserily means the price will go high as there can be block trades too, plus there are various means to buy/sell without significant change in price levels, Institutions generally acccumulate in small small levels, which dosen’t reflect high delivery percentage
there can be countless ways, market is hard to understand
who are the people willing to buy? are they day traders or long term investors? if they are day traders why they are willing bcoz at the end of the day they will have to square off and someone else has to be there to buy from them. if delivery taking investors are willing then i don’t think there are enough during the day to sustain the price rise.