“Some factors may reflect and predict the future demand for a stock,” he says. “These technical factors may be important because they give insight into the supply and demand dynamics of the stock,” Villamarin says. In addition, the price movement of one stock compared to the movement of another stock in the same industry or business sector can also influence the stock price.

Technical factors can also include the time of day or specific days of the week a trade takes place compared to other days and times, says Villamarin. “If company XYZ was trading at $100 per share with a total enterprise value of $100 million and offered a 2-1 stock split, the shares would now trade at $50 but the total enterprise value would not change since twice as many shares are now available,” he explains.Įven though it’s a stock split, Plumb says some investors are enticed by the lowered price, even though the business fundamentals didn’t change. “Take a stock split for example,” he says. Technical factors are things that change the supply and demand of the stock that won’t fundamentally alter the prospects of generating cash, Plumb says. That’s what a hedge fund trader’s entire job is all about: trying to pool money together to maximize returns on investments, all while predicting - or influencing, some say - what the market does. Nobody can predict every element that goes into stock price fluctuations, though many try. While some lucky traders were able to sell the stock at its peak and profit, many traders hoping to make a quick buck instead lost money when the price eventually fell back down.

A lot of times, it has to do with supply and demand, such as we saw during the infamous GameStop surge, when a collective of small individual traders drove share prices up. For more information, see How We Make Money.įrom the time markets open until trading closes, stock prices are in constant fluctuation.Įverything from a breakout news story to a shareholder meeting can impact a stock’s price. Some links on this page - clearly marked - may take you to a partner website and may result in us earning a referral commission. We want to help you make more informed decisions.

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