Index Investing - Does it affect Individual Stocks?

[Parth Thakkar]

Often times when I'm in positions of various stocks, I notice that seemingly strange price movements can occur for even low Beta stocks in ways that will violate Technicals and Fundamentals.

Is it possible that when people enter Index positions (S&P 500 or Dow Jones) that they can affect price movements of individual stocks?

Say for example, there's a lot exits in DJ positions, can those exits account for an unpredictable downward movement in the price of, say, CAT? (Ignoring that the stock is High Beta - I just picked an arbitrary DJ stock)

Thanks!