Quora Answer: How Do Stock Analysts Know if a Stock Price is Stable?

The following is my answer to a Quora question: “How do stock market analysts realise if a price is going to be stable?”

I am not sure what you mean by “stable”.  The market is never stable.  If the price is “stable”, that means that there is no market movement, and that is never good.  It implies there is no demand for the stock, but no pressing reason for existing stockholders to sell either.

What analysts try to do is predict movement, not stability.  We want to know where the price is likely to go, and take a position based on our strategy, and in the context of our portfolio.  That is why we pay a lot of attention to how the company is managed, its financial health, its cashflow and production.  And we look at currency exposure, political risk and the state of the economy, and how it affects this particular industry.