When the share price increases, it means that the buyers (on average) want to buy larger parcels of shares. When people buy large parcels of shares it generally means that they are very confident in the stock and its future prospects.

A large increase in Smart Money (Traders in the know) and Buyer Demand can occur before a large jump in price happens. This information lets you know that other people are very interested in this stock and are prepared to spend big money on it. This can be another good clue.

When you see large spikes in Buyer Demand when the price is starting to rise upwards it often indicates that the stock is set for a much longer bull run. The rushes for stock are caused from either news or rumors and (as long as there is no bad news) this activity will then start attracting attention from other traders.

Another great clue is to be found when Directors are buying there own stock. It means that they must have confidence in their own company to invest money in it. You can find out when Directors are buying and selling by checking the ASX company announcements on a daily basis.

Companies are on strict instructions to notify the ASX when ever a Director buys or sell shares in his company. Directors buying are usually based on a profit motive.

Christopher Strudwick is a keen amateur investor on the Australian Stock Market. Visit his weblog for more free articles and useful information at http://www.asxnewbie.com