Trading Analysis - 30th Nov 2018

Alfacomp

30 November 2018

9:50AM


The continued walkdown for no apparent reason will come as no surprise to those who have been watching and who are aware that the MMs are currently short of c. 4.5M shares.

Last trading day of November today and the tame Seller may have given instructions that all the stock needs to be cleared out today. If so then the MMs have a simple game to play. Bash it down a bit, hope to try and get some shorters to come out of the woodwork and try something silly on a quiet day ahead of a christmas tree shopping weekend. If the don't then no problem, cash in the Sellers shares and close your short. If the shorters do turn up then it is gluhwein all round as you can take the shares off them cheaply and give yourself a cheap long position for next week, cheers !

With 568K Buys vs 440K Sells there is no evidence of holders selling in any significant amount so we just sit and wait for the inevitable rise. 

1:30PM


The appearance of c. 1M significant sells (all but one in round numbers and believed to be from the tame seller) before 11am temporarily explains the drop in SP. However the c. 400K nett trading deficit is rapidly turned around by strong buying below 41p and quickly returns to an excess of Buys. No doubt we may get some more late reported sells later today, or even on Monday, as for the second day running today we have also received notification of a 250K Sell from yesterday.

End of Day


Another couple of hundred thousand of significant sells in the afternoon left the end day trading position close to neutrality. This obviously has no major impact on the accumulated Market Maker's trading position which stays close to 4.5M:-


One might conclude that little has happened today. This would be a mistake I believe. If you look at the significant Sells there were over 1.2M on Friday - again this is in line with the c. 1M of significant Sells on Thursday, likewise 0.4M on Wednesday and 1.1M on Tuesday. There appears to be  a significant absorption of shares being sold by our tame seller - these are moving to stickier hands ... and so consolidation results with the SP firming up at a higher base level.

It is happening as it always has, and as always the Market Makers are holding a short position that they may attempt to close, and turn into a long position at the expense of the tame seller, before letting the SP go. They, and anyone delaying buying in the hope that the share price will go lower, risk that next week the long advertised details of dividend programme are not released. When they are it will then be a rush to accumulate shares, and guaranteed the Market Makers will be first in the queue.

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