In recent years, there has been an explosion of interest in the field of sentiment analysis because investors are increasingly turning to social media platforms such as Twitter and Facebook to gauge the public’s opinion on a particular stock.
The collective opinion of the masses is often a good indicator of sentiment analysis for stock price predictions. When the sentiment around a stock is positive, the stock price is likely to go up. Conversely, when sentiment is negative, the stock price will more likely drop.
A strong positive sentiment in a stock can also help its rally continue to chart upward, which is an important part of understanding what causes trending stocks.
Of course, stock prices are affected by a whole host of factors, and the sentiment is just one piece of the puzzle. However, it is clear that sentiment analysis can be a valuable tool for investors looking to get an edge in the market.