In my opinion there were still too many sellers on that large volume trade. It looks like that large volume trade was a buy order to support a large sale. Notice that the price continues to rise up after that transaction, indicating to me that most if not all of the sellers have been exhausted. Price begins to rise when there are too many sellers and it only takes fewer buyers to advance the price. my $.02
TA experts: can you explain this?
- Thread starter Camilo99
- Start date
In my opinion there were still too many sellers on that large volume trade. It looks like that large volume trade was a buy order to support a large sale. Notice that the price continues to rise up after that transaction, indicating to me that most if not all of the sellers have been exhausted. Price begins to rise when there are too many sellers and it only takes fewer buyers to advance the price. my $.02
What calls my attention is not so much the size of the movement but rather the change in the mindset of market participants in such a short amount of time. Or in other words, I'm interested in understanding who could possibly made so many sell orders in such a short amount of time and keep the stock from going up. Based on the first price movement, its obvious that market participants didn't have orders clustered around those price points and there is not much interest on trading the stock. Check out how on the following minutes there were several minute interval in which not even one share was traded. But all of a sudden, someone puts a large block and somehow that block finds enough selling interest to match it. May be somebody thought the stock would go up and frontran those orders? Maybe this triggered some HFT algorithm? Maybe a market maker got interested? I'm interested in learning what could explain something like this.
Thanks for your insights Ironplates. I find very interesting what you're commenting on this being part of a strategy to support a large sale. Could you explain how would that work? Would they first put a large buy order to help raise the price and then use the momentum attained to start selling slowly during a larger interval of time? Or you think they did both things on that minute interval? That would be, they first bought and then sold a large quantity resulting in a low price change and they managed to evacuate their shares all in that same interval?
I am not sure what the situation was but from my education of tape reading this is what I think goes on.
This situation looks like an attempt to give the price action a floor.
This situation simply reveals something that IMO is fairly common. When there are too many sellers, Large buyers can be waiting.
It is kinda like a hallway that the short sellers traveled through. When they opened the door and saw massive buy order there, the buyers came in. The price action then rises higher because the buy stops and panic covering presses the price higher.
Thanks Ironplates, interesting theory. Do you know if it is possible to learn who is behind that large trade? At least, to learn if it was a large single trade or several smaller traes? Do people with level II or someone else can see it? Is it public information that could be asked to the exchange?
You are barking up the wrong tree, and I am no expert btw, so ignore my post if you so desire.
If you can remember Piece of P.I.S.S then you might go a long way.
Purpose = Make Money
Instrument = High liquidity with adequate range based on personal trading time preference.
Signal 1 = Entry with predefined loss level - not adjustable.
Signal 2 = Exit with predefined profit target - can be adjustable based on several factors, but always a safer bet to lock in profits and not get greedy like most do
Of the 2 signals, one is far more important than the other, and it will become obvious which one once you start doing a good few trades.
It really is a Piece of P.I.S.S, so why the hell would any person in their right mind want to make it complicated :eek:
J_S