It’s always a good idea to look at stocks that have risen in price to see what clues were there beforehand. By gaining a better understanding of what happened before the stock went up in price, you can give yourself a better chance of being on board for some of the next ones.
When the stock price increases, it means that buyers (on average) want to buy larger blocks of shares. When people buy large lots of shares, it usually means they are very confident in the stock and its future prospects.
A large increase in Smart Money (Informed Traders) and Buyer Demand can occur before a large jump in price occurs. This information lets you know that other people are very interested in this stock and are willing to spend a lot of money on it. This may be another good clue.
When you see big spikes in buyer demand when the price starts to rise, it often signals that the stock is poised for a much longer bull run. Stock rushes are due to news or rumors and (as long as there is no bad news) this activity will start to attract the attention of other traders.
Another big clue is found when directors buy their own shares. It means that they must have confidence in their own company to invest money in it. You can find out when Directors are buying and selling by checking the daily ASX company announcements.
Companies are strictly instructed to notify the ASX whenever a director buys or sells shares in their company. Director buyouts are generally based on a profit motive.
