Amit has a strawberry farm. In peak season, when the market has ample supply, Amit’s strawberries are less in demand & are sold at a lower price.
In off-season, Amit produces strawberries in his special nursery. At that time, there is a shortage of supply in the market. So, Amit’s strawberries are more in demand & are sold at a greater price.
Just like Amit’s strawberries, stock prices are influenced by their demand & supply flows. With rising demand, stock prices go up & with falling demand, stock prices go down.
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Several factors like a company’s profit & loss, positive & negative announcements, national economic trend, etc. determine the demand and supply of a particular stock.
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