MARKET PREDICTION: Yes, it is based on the available information of sale and buy orders that had matched and cleared. However, in the stock market and among traders, everyone has his/own crystal ball--meaning that because the price movement in the market may be call a "random process," it is not easy to forecast and even sophisticated software may miss. For that reason, all traders work with their "own" systems of predicting. Unmatched orders may just be non-disruptive noise.

UNMATCHED ORDERS INFLUENCE: Does unmatched order influence price on the next day and, thus, throw the forecast based on the latest closed or cleared matches (yesterday at closing hour) out of synch? Not really. Some investors may be using "crowd effect", i.e. going with the flow, but generally investors would use the latest available closed price, previous high-low and volume traded as preliminary info for decision making in the short-run. In addition, we check the news and current event of the day that might effect the prices on that day. Thus, these unmatched orders are considered residual from the last session and should not have much bearing on next day's price---unless the company is in trouble, such as bankruptcy filing or other shocking event. The unmatched orders from yesterday may show up as offer & bid on the screen when the market opens the next morning, but this would not be decisive in influencing traders submitting their offer & bid price on the next session.

If the unmatched orders has significant influence on the next day's session, it would subject the market to vulnerability of manipulation. The market knowledge-base, such as training and experience of traders, serves as a self corrective measures against such ill effect. Generally, unmatched orders do not have disruptive effect on the market. Since the stock market is highly regulated, if it could be disruptive, the SEC would step in and take corrective measures. The market is said to operate efficiently where all investors/traders have adequate information to make investment decisions.

Securities investors are likely to be less or more aggressive in submitting sell orders for stocks that experienced prior losses or prior gains in the last trading session at securities markets. Depending on whether the order experiences a loss or a gain, the relationship between sell order aggressiveness and prior losses or gain is likely to be either negative or quadratic in form. In sum, the investor behaviour behavior should be in line with the Prospect Theory of investment. This theory usually predicts how prior investment outcomes affect the risk-taking behavior of investors. Notably, investors can become either more or less risk-averse after prior gains.

Thanks Samuel O. Onyuma for discussing valid key points. I do agree that the market moves according to prospects. If  prospects are in the positive domain people generally have high risk averse preference and demonstrate risk seeking behavior at the time of negative domain. My question was related with unmatched orders/ AMO (after market operations) ordered after closing of market. Do these orders can be used to predict/forecast expected prices or returns?

Although new to it but may be could put some thoughts. I think the motivation for the trades would determine the market/behavioural impact of unmatched (the size of unmatched order too). Was the order information, value or liquidity driven or was it a result of passive portfolio management. E.g 

MARKET PREDICTION: Yes, it is based on the available information of sale and buy orders that had matched and cleared. However, in the stock market and among traders, everyone has his/own crystal ball--meaning that because the price movement in the market may be call a "random process," it is not easy to forecast and even sophisticated software may miss. For that reason, all traders work with their "own" systems of predicting. Unmatched orders may just be non-disruptive noise.

UNMATCHED ORDERS INFLUENCE: Does unmatched order influence price on the next day and, thus, throw the forecast based on the latest closed or cleared matches (yesterday at closing hour) out of synch? Not really. Some investors may be using "crowd effect", i.e. going with the flow, but generally investors would use the latest available closed price, previous high-low and volume traded as preliminary info for decision making in the short-run. In addition, we check the news and current event of the day that might effect the prices on that day. Thus, these unmatched orders are considered residual from the last session and should not have much bearing on next day's price---unless the company is in trouble, such as bankruptcy filing or other shocking event. The unmatched orders from yesterday may show up as offer & bid on the screen when the market opens the next morning, but this would not be decisive in influencing traders submitting their offer & bid price on the next session.

If the unmatched orders has significant influence on the next day's session, it would subject the market to vulnerability of manipulation. The market knowledge-base, such as training and experience of traders, serves as a self corrective measures against such ill effect. Generally, unmatched orders do not have disruptive effect on the market. Since the stock market is highly regulated, if it could be disruptive, the SEC would step in and take corrective measures. The market is said to operate efficiently where all investors/traders have adequate information to make investment decisions.

Thank you so much Paul for such a detailed explanation. This really helped me understanding the concept. Thanks