Trading Analysis - 5th Dec 2018


5 December 2018


Four 50K Sells near the start, apparently offsetting a similar number of PI Buys of the same size. A little bit of an early doors spike following the weird 40p Uncrossing Trade in the opening auction. No evidence of any large Sells dropped in from our apparently tame seller, either for today, or as has happened numerous times before, for the previous day.

The price continues to rise despite it appearing to be a quiet day - though we must remember, contrary to past experience, by 11am there has been almost £500,000 value of shares change hands. So not so quiet really - we should know very soon if we are now to be comparing ourselves to contemporaries in the AIM-50 Index.

End of Day

The sudden arrival of so many sells at the end of the day is of course very interesting - what can we see ?

Firstly a sequence of 4x 50K Sells appear, one of which is also duplicated as a pair (only one counted to nett trade balance, the other classed as an Inter-MM transfer). Mid-way during this sequence the Bid is dropped back to 41p - as if the MMs were preparing to take much lower prices from PI's or from a shorter.

Then there appears a gap of about 5 minutes when nothing happens - certainly no PI sells, and then the sequence of 4x 100K Sells starts. This takes us to the close of trading, and then there are Sells of 172,192 and 150K. All this appears to drop the nett MM's trading position from + 370K at 4pm to -430K at the end of the day. (A TNCP trade of 100K reported after 5pm is ignored).

It would seem credible that the MMs have now decided to reduce their short position, and having reached a price of 42p may have reached the level where they can again take shares from their tame seller, having first given the 50K seller the chance to induce any weak sellers just after 4pm (none turned up.)

However I am struck by the clear separation of trades in this region plus their even count and close timing , and wish to consider another trade allocation as shown below:-

This interpretation has two 50K Sells balanced by two 50K buys - some type of rollover, this subsequently followed by the same for 100K trades. The end of the day is reached with 42.50p again being paid for PI Buys, at which point the 150K and 172,192 trades turn up as sells to leave a surplus of 200K more Buys than Sells at the end of trading.

Of these interpretations I favour the second one 60% to the former 40% as it yields less of a dramatic turnaround in MM exposure, especially as it would have been obtained with relatively tedious (for the MMs) 100K trade sizes.

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