When the major investors in the market act, they exert tremendous influence over stock prices. Institutions such as mutual funds, pension funds, and banks buy and sell stocks in large blocks. These large transactions tend to drive prices up or down depending on the degree of buying or selling. Stocks are just as subject to the law of supply and demand as any other product. When demand for a stock increases, its price usually increases. Conversely, stock prices tend to fall when there is an ample supply of shares or decreased demand.
Identifying stocks with heavy institutional buying activity is a crucial element in locating stocks poised for big price moves.
Investor's Business Daily's “Stocks On The Move” screen shows you the stocks with significant increases over their average trading volume. Big increases in volume percentage change often indicate increased demand from institutional investors. This increasing demand could translate into an increasing share price.
To learn more about why supply and demand is an important factor in choosing stocks, you can read the following article in Investor's Corner by clicking this link.