Contra Market

Contra market can be defined as a move or a behavior of an entity against the broad and happening trend of the market. The entities involve in contra market can be categorized as securities and sectors that have a negative correlation with the broader index of the market and the general economy of the market. These sectors and the securities always act opposite to that of economy and thrive when economy is weak where as perform weakly when the economy is strong. This means that these sectors act opposite to that of economy. A contra market sector or a contra market security is a kind of security that performs well in bearish trends of the stock market or overall economy and performs low in the bullish trends of the stock market or the economies. The example of such kind of securities and stocks are the defensive stocks that perform well even when the overall economy is down due to their immunity and to the economic behaviors and economic cycles. For examples the shares of medicines and pharmaceutical companies will always perform well even if the economy is slow and performing poorly due to their immunity and ability to cover up even in the weak economical situations. However such stock may trend less when the economy is strong and the investors and other creditors are attracted more towards the more risky securities as the rate of return associated with them is higher. US treasury and gold is also another example of contra market as they have extensive appeal even in the time of turmoil in the economy.

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