The simple answer to your query is the theory of demand and supply. And that too at different price points.
Say you and me are interested in buying shares of company A at say Rs 100. Now the two of us have a combined capacity to buy 1 lac shares. But if a mutual fund comes around to sell 1 crore shares, who will absorb the rest of the 99 lac shares? Maybe you and me can influence our friends and families to buy additional 5 lac shares at 95 (as we feel that since we bought at 100, our friends and families are getting a better deal by buying at 95. ) But that still leaves 94 lac shares. So some guys following my write up and maybe your write up or someone else’s twitter thread will come around and buy at 90. Say 4-5 lac shares. But the mutual fund guy is still left with close to 89 lac shares. And he is facing redemption pressure and wants to sell at any price. So price can go even lower before deep value investors step in. That’s how things work in stock markets.
The fall is arrested if at some level a big buyer of say 80 lac shares feels that price is too attractive at around 70 and starts buying in real earnest. This often creates a short term bottom (ultimately this can turn out to be long term bottom)
For every stock that a person sells, there is a buyer and both of them think they are smart. One of them can be smart in short term and dumb in long term, or vice versa.
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