In the stock market, many people enter a stock after the price has already moved, and by then a large part of the profit opportunity is gone. However, experienced traders and investors often spot signals before a big move begins.
In reality, big moves usually do not happen suddenly. Certain clues appear in advance. Changes in volume, price levels, delivery data, sector activity, and smart money behavior often indicate that something big may soon happen in a stock.
In this article, we will understand five important signals in simple language, along with examples, so even beginners can understand them easily.
1) Sudden Increase in Volume – Money Is Entering
What is the signal?
If a stock’s price is not moving much but trading volume suddenly increases, it usually means that large investors are quietly taking positions.
An increase in volume often means:
- Interest in the stock is rising
- Smart money may be entering
- A price move could be coming soon
Example
Suppose a stock has been trading between ₹100–105 for months, with daily volume around 2 lakh shares. Suddenly, volume jumps to 8–10 lakh shares while the price still moves slowly.
This may indicate:
👉 Someone is accumulating shares quietly.
👉 A breakout could follow soon.
2) Breaking Important Price Levels (Breakout or Breakdown)
When a stock trades within a range for a long time, pressure builds. Once this pressure is released, a strong move often follows.
What is a breakout?
When price moves above a strong resistance level.
What is a breakdown?
When price falls below a strong support level.
Example
A stock repeatedly fails to cross ₹150. One day, it breaks above ₹150 with strong volume.
This suggests:
👉 Buyers are gaining control.
👉 The stock may move higher quickly.
Similarly, if support breaks, a sharp fall may follow.
3) Rising Delivery Percentage – Investors Are Holding
Delivery data shows how many shares are actually held by investors after trading, instead of being traded intraday.
What is the signal?
If delivery percentage increases, it usually means:
- Investors are holding shares
- Buying is happening for investment, not just trading
- A potential trend may develop
Example
A stock normally has 30% delivery. Suddenly delivery rises to 55–60%.
This suggests:
👉 Investors want to hold the stock.
👉 A future move may develop.
4) Sector-Wide Movement – Money Flows into Sectors
In markets, money often flows into entire sectors, not just one stock.
If multiple stocks from the same sector start rising together, it usually means that the sector is attracting investment.
Example
Suddenly:
- Banking stocks begin rising
- PSU banks show strength
- Financial stocks break out
This indicates:
👉 Sector rotation is happening.
👉 Other stocks in the sector may also move.
5) Price Movement Before News or Results – Smart Money Acts Early
Sometimes stocks start moving before news or results are announced.
This suggests:
- Investors expect positive developments
- Smart money enters before the news becomes public
Example
A stock slowly starts rising about 10 days before company results. Later, results turn out strong.
👉 Investors who entered earlier benefit the most.
How to Combine These Signals
Depending on just one signal can be risky. Smart investors look for multiple signals together.
A strong setup usually includes:
- Rising volume
- Breakout from resistance
- Strong delivery data
- Sector momentum
When several signals align, the probability of a strong move increases.
Final Conclusion – Follow Signals, Not Guesswork
Success in the stock market does not come from guessing, but from understanding signals.
Investors who stay patient and wait for proper signals usually achieve more consistent results.
Remember:
👉 Signals appear first, price moves later.
