Volume Shockers NSE and BSE, Stock Market Index Analysis
A counter view to the price shockers is the volume shockers. Volume shockers NSE
and BSE are those stocks that see a sudden spurt in volumes. The idea is to identify
stocks that are seeing a sudden spike in volumes. As a method of stock market index
analysis, the volume shockers are good start points to identify interesting stocks.
We can either look at volumes in terms of number of shares or in terms of value.
It is always more advisable to look at volume in terms of number of shares because
it automatically adjusts the price effect. That is a more realistic view of the
increase in volumes of the stock.
Volume shockers at LKP Securities website…
LKP Securities has dedicated the complete page to volume shockers. You can filter
volume shockers on the NSE or on the BSE. Obviously, the BSE volume shockers will
be much bigger as there are more stocks in the mid-cap and small cap space. It is
essential to keep a basic cut-off for volumes before you start looking at these
volume shockers seriously. Volumes growing substantially on a very small base are
nothing to write home about. It is only when volumes grow on a larger base that
one can interpret that as a trend. LKP Securities does not just look at point-to-point
shift in volumes but compares the daily volumes of a stock vis-à-vis its average
volumes of the past. This ensures that the sudden shifts in volume are evened out
and a more realistic base is used. The page actually lists the toppers in terms
of volume shockers based on the average volumes of the past.
Why volume shockers are important…
Intuitively we are all aware that when a company is likely to outperform you see
an advance signal in the form of rise in volumes. That is the purpose of this page.
When you index on the top volume shockers, you get a universe of 5-7 stocks that
you can focus on and delve deeper. Normally, volume shockers could mean a variety
of things. Firstly, it could mean that some large investor or institution is gradually
accumulating the stock. Secondly, it could also mean that the company is either
likely to get a big order or report a sharp increase in profits. Hence the early
birds are trying to get into the stock first. Thirdly, it is also possible that
the particular sector is undergoing a re-rating on an overall basis and that is
leading to a rise in volumes in all stocks in a particular sector. In fact, if you
break up the volume shockers by industry you can get some interesting sectoral trends.
The next step is that you need to drill deeper. If the increase in volumes is purely
in the form of speculative volumes then it is not very significant. But if you find
the volume shockers showing a rise in delivery volumes and also interest from informed
investors, then it could be something for you to serious look into. That is where
volume shockers can be of help!