Top Gainers BSE

The top BSE gainers today are those stocks listed on the Bombay Stock Exchange that have seen the highest increases in stock price since the previous day’s closing. Traders apply the BSE top gainers as an indicator of which stocks to trade in. Today top gainers can help you understand which particular sectors, companies, indices etc are showing a strong momentum towards increasing in price and thereby help you to understand market conditions better.

There are a set of ways to interpret the BSE top gainers which we can look at below -

1. Some can consider the top gainer stocks to be overpriced. This is because it is expected that stock prices, even when growing in the long run, move along a rough trajectory - this means even if they move up and down in the short run, over time, their average movement can be represented by a smoother curve. Therefore, when a stock price increases by a significant amount during a single day’s trading hours, many traders may expect that it will either correct itself and thereby fall by a little in the coming days or even if it increases, the increase will not be as significant as before.
2. Some can consider a top gainer stock as one that is gaining in momentum and is therefore feasible to be bullish on. However, for such traders, there are better methods to judge the future performance of the stock such as -
   • Momentum indicators - They can help understand if the top gainer stock is experiencing a one off increase or is the increase in stock price the part of a larger bullish momentum in the market regarding the stock.
   • Volatility indicators - If the trader knows the usual level of volatility that the stock undergoes under similar circumstances, then the trader can better identify if the day’s gains are a one off increase that will be corrected soon or is it a genuine outlier that is signalling a rise in the stock price.
   • Volume indicators - If the increase in stock price is backed by a simultaneous and nearly equal increase in the trading volumes of the stock, then it is more likely that the stock price will see a sustained rise in the coming days. Otherwise, if the volumes are low, then it may come across as an unsustainable growth in price that is not worth betting on.
   • Fundamental analysis based on events and financials - A top gainer stock may experience that kind of increase in stock price simply because of some event that was not under the control of that company. For example, the government may have deregulated their sector or a new source of raw material may have been discovered for their manufacturing unit. In such cases, the trader/investor must observe whether the event that has caused the increase in stock price and the impact of the said event is going to be long-lasting or not. If not, then the stock price is likely to be corrected in the coming days.

Therefore, we can see that the BSE top gainer cannot be interpreted in isolation from associated fundamental and technical factors. Traders may try to predict which stocks may turn out to be top gainers by using trend and momentum indicators alongside candlestick pattern analysis, but the fact whether a stock has already become a top gainer may not be able to give a definite answer to any questions in the minds of investors or traders.