How to know which shares the player is picking up?

In the stock market, many investors are interested in the topic - "Which shares are the players picking up?" When a stock starts to rise suddenly, when the trading volume increases abnormally or when the discussion about it increases in the market, many people think, "Are big investors involved in this stock?" But the truth is that it is not easy to prove 100 percent that players are definitely picking up shares in any stock from the outside. Based on the price seen in the market, transaction volume, floorsheet and supply-demand, only the probability can be estimated.

First of all, we need to understand what is “share raising”. In the language of the market, the situation where big investors gradually start buying more shares is called stock raising. In this case, they usually don't buy too much at once. Instead, they seek to accumulate shares by gradually absorbing the sales coming into the market, in small fluctuations, without lowering the price too much. It can also be called a state of accumulation. The player's shares can be identified by looking at the various conditions given below.

Increase turnover without increasing prices too much If a stock has been moving in a stable or small range for a long time, but its daily trading volume is gradually increasing, it may be accumulating. Because big investors want to accumulate shares at cheap or stable prices without much fuss. But this is only a hint, not a definitive proof.  When it decreases, it does not decrease much, when it increases, it gradually strengthens Even when the market is weak in a stock, if the price does not fall much, if there is a tendency for buyers to come quickly after a small fall and try to go up gradually, then it can be understood that the demand is strong. It is not clear whether such demand comes from ordinary investors only or from big investors. But it gives an indication that there is buying support in the stock.

behavior of vol It can be understood that many investors are not willing to sell if the trading volume looks good when the stock goes up but the trading volume is low when it goes down. In such a case, there may be a possibility that large buyers are gradually picking up shares. But on the contrary, if after the stock has increased a lot, there is excessive volume, there may be a situation where the profit is booked and sold instead of being raised. Recurring purchases on floorsheets If a stock is seen to be continuously buying in large quantities from some broker, then the investor sees it as a signal. But a lot of caution is required when interpreting floorsheets. Thousands of clients can transact from a single broker. So it may be wrong to conclude that “such and such broker bought, so the player is raising”. Floorsheets should only be used as a guide.

Increase business before rumors Informed buying may have occurred if the trading volume has started to gradually increase before the big news, dividend, rights issue, merger, project or financial reform has become widespread in the market. But here too there is a risk, because sometimes the turnover may be inflated for the purpose of making noise. So caution is required till the official notification. The relationship between company fundamentals and value If the financial condition of the company is improving, profits are increasing, debt is decreasing, dividend capacity is increasing or business is expanding and at the same time the serial turnover in the shares is increasing, then it can be considered healthy accumulation. But if the company is weak, no profit, no dividend potential, but the share is only increasing unnaturally, it can be a player's move and the risk of small investors getting trapped is high.

Unusual activity in low float shares Large investors can quickly influence the price of a company with a small number of shares readily available in the market. Even a small amount of money in such stocks can increase the price. Therefore, special caution is required in shares with low float, low turnover but sudden high volume. Such activity can also lead to accumulation, but the risk of pump and dump is also high. Price stays in the same range for a long time A stock is trading in the same range for a long period of time without increasing or decreasing, but if the volume is gradually increasing during that period, there may be a possibility that large investors are accumulating shares. It is also called the situation of making a base in the market. But there is no guarantee that the price will go up after the base; It can also go down if there is bad news.

Decrease noise when price increases Often, small investors only start looking at stocks after they get a lot of buzz on social media. But there may not be much buzz in the market when big investors are picking up. When the stock reaches a high level, only then the talk of "this stock will fly" can increase. So it can be risky to enter when the buzz is high, as the pick-up phase may be over and the sell-off phase has begun. Stocks look strong even when the market is weak Even on a day when NEPSE is falling or when the related sector is weak, if a share does not fall too much, demand is sustained or there is buying pressure at the last moment, it can be assumed that it has strong support. But even this is not always a sign of a player; Sometimes investors may not want to sell because the company's fundamentals are good. But investors should always remember one thing—finding out which stocks a player is picking up is a risky exercise in itself. Because big investors plan, capital and exit strategy are different from small investors. They can enter at a lower price and sell when the market conditions. Small investors often enter late after hearing rumors and get trapped when prices fall.

So don't just rely on volume, floorsheet or circuit to see if a stock is a player. Company's financial statement, EPS, net worth, PE ratio, dividend potential, debt, business prospects and sector conditions should also be looked at. If the company is weak but the stock is only going up, it may be more speculation than investment. In simple terms, a player is more likely to pick up shares when the stock rises gradually without much noise, the volume increases gradually even though the price does not jump too much, there is strong support when it falls, there is continuous buying in the floorsheet, the fundamentals of the company are improving and the available shares in the market are limited. But even if all these signs are found, it cannot be said that the player is picking up for sure. These are only possible indications.