Trading Analysis - 4th Dec 2018

Alfacomp

4 December 2018

9:50AM


I suggested yesterday that maybe our tame seller had put a minimum price of 40p on the shares they would allow to be sold, and that simply the MMs went below this to see if they could score any shares even more cheaply off of PI's. 

They may have done, but it may well have been courtesy of a somewhat foolish short seller who sold 9x30K into the market very early on yesterday. This attempt at price manipulation would have been easily spotted by the Market Makers, just as it was by us. It would have even been tolerated for a brief while as MMs sat back and waited to see if any other sellers appeared as a result. They did not and so today the MMs are quite happy to move the price back the other way to put the shorter in the dock. 

As mentioned yesterday it will be interesting to see if the MMs tame seller reappears with a few 250K sells to help the MMs keep their short position in check. With the MMs by my calculations still short of 5M shares I cannot see how the tame seller could not be hauled back in later today. However if they are not or a significant Buyer now steps forward then we could be in for the start of a very significant rerate.

12:10AM


After 3x50K Sells, highlighted in Yellow, before 9:30 the MMs have struggled to get any appreciable sells save for the 162,262 at 10:15:16. They continue to move the price up, with now close to 700K more Buys than Sells.

Again we wait to see if any significant Sells are provided by our tame-seller. If they are to come then I believe that it will be later today as a high finish today might attract in the day traders - if the MMs don't wish to risk having their short position further deepened they might wish to throw the Sells they can in later today to prevent that from happening. On the other hand if they are sitting pretty with someone willing to part with many millions of shares at little more than 40p then the concept of 'risk' is something that will perhaps not apply in this situation and they might consider that attracting a big block of buyers may be exactly what they want to make up their christmas bonuses.

End of Day


Another 3x 50K Sells spread throughout the afternoon, plus a total of 3x 100K Sells also appearing after 10am was not sufficient to stop the excess of Buys reaching 500K at the close of the day. There was no evidence of the trading book being balanced by sells from the tame seller - so either they are out of shares, and the organic selling after 10am was sufficient to keep the SP essentially where it had got to by that time, or they are no longer prepared to take 41p for their shares ... or the MMs simply used today to squeeze the shorters from yesterday as they did on the 20th-21st of November.

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