Factor influencing day trading
Share market always reacts for appropriate news.
If possible watch financial news channels to keep updated yourself all the time.
Like merger announcement, this news will impact more if the Merger is related to foreign company.
Merger and Demerger announcement may have major impact on related company shares.
Acquisition (takeover) Announcement
Takeover of some part (or whole) of companies, especially those having larger capacity/turnover or foreign company’s.
This news will have major impact on that particular share.
Shares may rise, don’t miss this opportunity.
Entire takeover will have most positive impact on shares.
News like elections in the country or in any particular state, news of any major change in political upfront or in any change in rules will also have major impact on Indian share market. Political news related to any particular State will have major impact on companies located in that state.
So the conclusion is any major political news will have major impact on shares.
The shares of Indian share market have different sectors and if any announcement byGovernment for any particular sector will have major impact on shares of that sector.
Following are few sectors.
Banking - ICICI, SBI, UTI, Indian Bank etc.
Hike or decrease in interest rates, loan rates etc.
Oil - PCL, BPCL etc.
Hike or decrease in diesel prices, hike or decrease in crude oil prices etc.
Retail - Dabur, ITC, etc.
News related to any taxes etc.
Cement - Indian Cement, Gujarat Ambuja cement etc.
Hike or decrease in cement prices.
In short sector related news will affect the shares from that sector.
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Important Factors to follow
If you want to earn good money in intraday then you have to be very alert and keep watch on following points to become successful intraday trader.
The shares may rise or fall due to number of reasons, some of them are mentioned below.
If you at least keep a watch on following factors. You can save yourself from big loss and earn good amount if you trade according with the market direction and not the against market direction.
To become successful trader you have to follow the market and dont keep guessing the market direction.
Impact of Other Asian Market
Most of the time it has been observed and studied that Indian Market (Nifty/Sensex) follows other Asian markets and USA markets.
Asian markets like China - Shanghai’s market, Japan - Nikkei market, Hong Kong - Hang Sung market.
Above all Asian markets “open” early in the morning than Indian market.
Most of the time Indian market will follow this Asian markets. If these Asian markets open in positive and lead to positive direction than the Indian markets may react accordingly provided that there is no major news in India.
USA market - USA markets like NASDAQ and DOW will also have major impact on Indian market. So, in short
in the morning around 9.30 am get all news above USA markets and Asian markets and then plan your trades accordingly.
Quarterly Results - (Very important)
Quarterly results declared by all Indian Companies will have major impact on that company and hence on their
shares in Indian share market.
Every company declares its quarterly results. If any company declares extra-ordinary results then this will definitely affect its shares.
Most of all share traders and analyst concentrate much on company's profit and sales. If company
achieved good profit and declare dividend, bonus shares etc this will make positive impact on shares
of that company.
Fundamental news means companies future turnover announcements, any change in director body, future product releases etc.
If the company has good fundamentals like board of directors, companies expansion plans, future acquisition etc then its worth to invest in such companies for long term.
Individual share - If the share is over bought, then some profit taking will takes place (price may come down)
and if share is over sold then you may see some buying (price may go up) than you can plan your trades accordingly.
Inflation Rate - (Very important)
Inflation rate is wholesale prices of consumer goods.
This rate is declared by Government for every week at friday.
The inflation rate indicates what was the wholesale price index for previous week. If it is low as compared to its earlier week then it is positive news and you may see share prices going up and if the rate is higher as compared to its earlier week then it is negative and this may affect share prices negatively and prices may come down.
So keep a watch. Inflation rate declare by Indian Government at every friday and trade accordingly.
“Indian share market reacts to inflation rate”.
Future/Derivative Expiry - (Very important)
Future/Derivatives have expiry period of one month. Derivatives get expired on last Thursday of every month.
Future/Derivative gets expire means you have to sell your future/derivatives which you are carrying for whole last month.
Due to this expiry period share traders sell there derivatives, due to which shares prices may come down.
If you watch the share market carefully this selling movement starts before one or two days of expiry. So be cautious and plan your trade accordingly.
During this expiry period you may see shares prices coming down then you can plan your buying and selling accordingly.
Where to Keep Watch
Keep a close watch on shares which comes under top gainers, top losers and which are touching all time high or touching all time low.
What you have to do is, after market hours (when market closes at 3.30 pm) you can make a list of all such shares and plan your trade according for next trading day.
Please note -
Touching all time high or 52 week high is bullish sign.
Touching all time low or 52 week low is bearish sign.
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