Trading Analysis - 23rd Nov 2018

Alfacomp

23 November 2018

10:20AM


Quiet. 0.8M Buys vs 0.6M Sells, nothing over 100K on either side. 

2:20PM


Total volume on 2.4M today. A year ago that would have been a lot. Nowadays it is low, even with the SP 5 times higher.

On a quiet Friday afternoon, when people may be out Christmas shopping it is always worth being on guard for a late flash shorting attack (remember the short on the August bank holiday friday last year) - perhaps you too can snap up some Black Friday bargains later today !

End of Day   


Total volume on 3.0M today.

This includes two interesting trades late in the afternoon - first at 15:10:02 a 150K sell at 44.25 (highlighted in green) followed about 1 minute later by what appears to be a duplicated 150K sell at 44.10.

This appears to conform to the triplet type trade structure first observed on the 22nd October 2018 - as on that day we appear to have a very similar kind of trade structure repeated later on in the day - here for 100K at 16:32 highlighted in yellow. As for the 22nd of October only a single one of each of these sets of trades actually affects the nett Market Makers position - the others are simply inter-MM transfers which have zero effect on the nett MM position.


Nett Market Maker's Position


The last couple of days have ended with rather balanced trading - MMs have bought and sold very similar numbers of shares.

This was following the rapid share price recovery of the 21st November which followed the clear shorting day of the 20th November. On both of these days the MMs sold roughly 1.3M more shares than they were able to buy from PI's - over the week the MM's short position has grown from c 2.5M to c. 5M. 

The 20th November short was comprehensively squeezed by the action of PI's buying on both days, and by the MMs, who saw which way the wind was blowing, who raised the SP on the 21st. The short was defeated but at the cost of the MM's own short position growing to 5M. They are no doubt hoping that significant news does not arrive early next week, or they will struggle to handle buying pressure, stretched as they appear to be. 

Significant buying pressure, following, for example the publication of Bushveld Energy plans, or dividend distribution policy, will in my opinion lead rapidly to 50p being breached and 60p being approached.

The only way to get shares following this will be for MMs to buy from sellers at much higher prices - and the only way they can pay for those is to get buyers to pay much higher prices. Anyone wishing to buy shares on this news would be advised to not hang around or they will be forced to pay top dollar.

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