I’ve seen stock behave differently in different periods, sometimes low and sometimes high but something else is behind the demand and supply that results in that, I want to know what is it.
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I’ve seen stock behave differently in different periods, sometimes low and sometimes high but something else is behind the demand and supply that results in that, I want to know what is it.
Consolidation period simply means a time when a stock is moving sideways, not going up or down strongly. During this period, the price stays within a small range because buyers and sellers are balanced. What is happening behind the scenes is demand and supply trying to find a new direction. Buyers aRead more
Consolidation period simply means a time when a stock is moving sideways, not going up or down strongly. During this period, the price stays within a small range because buyers and sellers are balanced.
What is happening behind the scenes is demand and supply trying to find a new direction. Buyers are not strong enough to push the price higher, and sellers are not strong enough to push it lower, so the price keeps moving within a narrow range.
Let me borrow Mama Ngozi from Mr. Iking Ferry to explain this better.
Imagine Mama Ngozi is selling tomatoes in the village.
At some point, the price of tomatoes becomes stable because the number of people buying and the number of tomatoes available are balanced.
The price is not increasing or decreasing much. That is like consolidation. But after some time, if more buyers enter the market or supply reduces, the price may start to move up or down again.
In stock market terms, consolidation often happens before a major move. It is like the market is taking a break before deciding its next direction.
in simple terms:
See lessConsolidation is a period of balance where the market is gathering strength. Once demand or supply becomes stronger, the price will eventually break out of that range either upward or downward.