| Sellers |
| How many entities want to surrender what is available to trade? |
| How many and how needy are they? |
| Sellers
who own an issue, as opposed to short sellers, keep the market liquid and cause price
movements in the logical directions: Up when there is a shortage of sellers, down
when there is an excess of sellers. Watch for events where suddenly an issue moves
up in price quickly, almost violently. Something (probably positive for the issue)
has happened to cause a large portion of the sellers to withdraw their offers nearly
concurrently. There may or may not be a rush of new buyers. The opposite situation can also occur. A market may be experiencing regular trading volume and price movements when, suddenly the volume increases quickly and the price drops rapidly. Something happened to cause sellers to offer a large amount of the issue at rolling decreasing prices nearly concurrently with each other. There may or may not be a rush of new sellers. These moves are usually attributed to some piece of news, either company specific, market related, domestic or global perceived by active market players to be something that will impact the specific issue. |
| See also: Liquidity |
| The investment axiom that is always valid: Caveat Emptor |
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