Share price movement

[Harmonica]

Hi

Could someone please enlighten me on this, because I am really new to trading, I'm I right in thinking that the only thing that makes a share go up or down is the number of people buying or selling a particular stock, because I have just recently bought some partygaming stock and since friday it as go down, why would this happen is it traders getting out with there 30% profits on the ipo price or something else?

Thanks in advance

[StickyWicket]

Generally speaking, stock prices go up when more people are buying than selling on a particular day, and vice versa. Party Gaming is technically a "penny stock" by US market standards, so you're going to have some investors with HUGE blocks of shares (tens and hundreds of thousands) who are looking for short-term profits and moving large blocks of the stock, perhaps saying "take the 30% and run."

Moreover, if you're concerned about the issue having dropped a bit after only having been on the market for a week, your perspective might be off. Why did you buy the issue? Short-term profit in a penny stock that is going to be eaten alive by short-term capital gains taxes or to invest in the issue and stick by it through a business cycle, which will generally last from 18-36 months? A stock's movement, especially one priced under $3 as Party Gaming is, over 7 days (not EVEN) is generally no indication of it's long-term performance. Case in point, (though a simple one), nobody wanted anything to do with GM a month ago when the investing world deemed it's issues "junk." Now, they posted their best month ever, and many people are wishing they'd bought the issue when it was down [img]/images/graemlins/smile.gif[/img]

I hope this helps some...perhaps not. Stocks go up, stocks go down. Anyone who tells you otherwise is selling you something that you don't want to own...

Sticky [img]/images/graemlins/heart.gif[/img]

[tek]

Me thinks volume also has an effect on price movement...

[StickyWicket]

[ QUOTE ]
Generally speaking, stock prices go up when more people are buying than selling on a particular day, and vice versa. Party Gaming is technically a "penny stock" by US market standards, so you're going to have some investors with HUGE blocks of shares (tens and hundreds of thousands) who are looking for short-term profits and moving large blocks of the stock, perhaps saying "take the 30% and run."


[/ QUOTE ]

huge blocks=volume [img]/images/graemlins/grin.gif[/img]

[Harmonica]

Hi

I also forgot to mention, this as well if people are selling shares in a stock and profit taking then who his buying these shares from the people who are profit taking, because the buyers would be losing money wouldn't they, or is this just an over simplistic view on my part?

Thanks in advance

[Sniper]

People buy and sell shares for many reasons, however in general, people buy stock because they think its going up and people sell stock because they think its going down.

Similar to poker, if you have a good read on other people, you will make more correct decisions than wrong ones.

[OrangeCat]

What one person sees as taking a profit, another sees as a buying opportunity.

[wildwood]

Urgency is the answer. If a stock trades 50K shares today, there had to be a buyer and a seller for every share. If the buyers have the urgency, the stock will rise; if the sellers have the urgency the stock will decline. If for example alot of the public wants to sell stock and there are not enough buyers, then that is where the specialists on the floor of the exchange pick up the slack and "make a market". That is their function, but they only do this at prices favorable to them. The specialist will buy the stock everyone wants to sell, but only at lower and lower prices to reduce their risk. The specialist will then try to sell the stock into a rise later on. (Reverse this process if there is an imbalance of buy orders).

[Ross Schultz]

People buying the stock when it goes down could also be short sellers covering their short which would actually be making them money (Assumming the stock is lower than where they sold short).