Market sentiment analysis is a technique used to gauge the mood, emotions, and opinions of investors and traders in the stock markets. It is also known as market mood index. It involves analyzing various sources of information, such as financial reports, market data, money flow, news and views from different sources to assess the overall sentiments or mood of the market participants.
Investor Sentiment Impact on Stocks
The basic idea is that investor sentiment can influence stock prices. Depending on whose sentiments are taken into consideration, retail investor or smart money? Smart money (big investors like FIIs, Mutual Funds etc.) moves the market while dumb money gives a view of playing contrarian. Sentiments Decoder takes account of smart money as a very important input factor to compute sentiment of a stock! If smart money is optimistic about the future prospects of a stock then it would lead to positive sentiments. Conversely, if the sentiment is negative, it can result in selling pressure and declining prices.
