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angelaktariel

Smart Money Buying? 100,000 Shares...

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I have a quick question. I was just watching one my stocks and the tape indicated that someone just bought 100,000 shares. This was right at the end of the day, than I saw a few more big buys, like 39,900 shares and 18,700 shares.

 

Being that it is the end of the day, does this mean, tomorrow those buyers will short the stock?

 

I am holding this stock as a swing trade, so I was wondering what can I expect tomorrow morning with it.

 

Thanks,

Eva

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Its possible that its institutional block orders placed at the close. Could be one party or a number of parties orders grouped together. Possible that a hedge fund took a long position for its portfolio.

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OK, so it doesn't necesseraly mean that they bought it up to short first thing in the morning....I thought perhaps that is why they bougth it. There was a huge stock buyback on this one today, according to the news, perhaps this was the last of it for the day.

 

Thanks for the quick answer.

 

Eva

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Eva - your guess is as good as anyone's as to who/what/where/why that large block was made. When you watch tomorrow your eyes will see that either 1) that big purchase was made to push it up at the open or 2) that big purchase was made to help push it down at the open. Regardless, you won't know what really caused it to happen.

 

That big purchase could simply have been the stock buyback as you indicated which might have little to no effect. Or, it could have a big effect.

 

;)

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Exactly like Brownsfan mentioned. You will need to see what happens tomorrow to fully understand the meaning of the block orders you saw. But keep in mind that the hint you spotted may have a significant meaning.

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Thank you both. You better believe I will be watching it like a hawk...hehehe. This stock is typically on my list anyway, and I was just scanning for news about it, that is how I found this little tip.

 

It is good learning for me about these block buys....they supposable bought back 2.5 billion stocks back today for this one.

 

Thanks,

Eva

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The argument often goes that if someone bought then someone sold ... that argument doesn't hold water with me, if the transactions are instead viewed within the context of price progression then we can apply some analysis. This might be an ideal opportunity to apply some Wyckoff techniques, or even just some VSA techniques ,and see what we can come up with in the way of probabilities.

 

On a purely simplistic view, if the purchases were part of a stock buy back then they should be bullish ... not necessarily for tomorrow of course.

 

If you want to share the code Eva we can have a look?

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It was me, sorry I didn't mean to cause this much trouble. All that money from the candlestick thread I had to put it somewhere ;)

 

On a more serious note, my guess would lean towards what James originally said about a block order going through at the end. Often times a mutual fund or two will need to balance out their portfolio and build a position. So they tell the market maker they need to buy or sell x amount of shares, throughout the day the market maker will try to push those orders through and sometimes he/she is forced to do so at the end when the market is liquid enough.

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See how you are???? Hehehe.....

 

I see the point and it makes sense and I guess also the stock buyback makes sense, too. It was just interesting for me to see those huge chunks just showing up.

 

I am really intrigued by these market makers moving the markets, just too interesting.

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OK - here is my take on STX as of now. Usual caveats apply. Be interested to hear of others' take on things.

 

Chart 1, the 1 point by 3 box reversal shows a big spike down to the August 07 lows, and a reaction from there to where it closed today. So once again there was demand around the $19 level (downto $18.50). This spike down could well be what Wyckoff analysts will refer to as Preliminary Support.

 

Chart 2, a 1 point by 1 box reversal shows me some signs of accumulation beginning - after the preliminary supply and 3 point rise we have a small dip (test) and then continued buying (response). Strength. As of now, though, this move from the preliminary supply spike down is not enough to take it on an extended move higher, there will need to be more accumulation before a significant rally can develop. Thus expect sideways (to aid the process of accumulation) from here, not straight up.

 

Chart 3 is the daily OHLC/candle. It shows some VSA warnings. Zoom in to chart 4 to make these clearer.

 

I will point out some significant points to me - they are in the past so are of limited value now, but these are the things I do watch for.

The move down in mid Jan on huge volume - reversed by a Marubozu day on the 22nd followed by a bullish hammer the next day (I should clarify, the names of the candles are not the important things, rather the price moves that they represent are what are important to me. And, especially on daily charts, the closing price is of a lot more significance than the opening price)). Both on good size volumes, obviously demand is re-entering the market. Supply showed itself on the 31st - narrow range with jump in volume, but demand was also present that day, there is strength here as indicated by the hammer on the 4th.

 

The rally since then has been on reasonable volumes, although declining. The price is now re-entering an area of previous congestion (early Jan, $22 to $24). The price action for the 11th shows another test lower (the lower shadow of the candle) with a strong close, but volume is still declining.

 

For me, the rally from the preliminary support low has about run its course for now, there could well be another point in it, but the probabilities say to me that demand is slowing - any move up above the highs of the 11th are a good opportunity to take profits on longs.

 

Keep in mind that price volume analysis is like a movie, you have to keep watching as things change, but on what is presented as of now thats my view.

 

One more thing - it is very interesting with news of the buy back being talked about. If you are of the view that news is used as a tool of manipulation much of the time (I am) then this news is a warning bell that someone wants you to be buying here.

 

ps - I dont have a feed for US stocks, so I am very impressed by Stockcharts!

5aa70e3d08fb2_STX3.thumb.png.be424a725a730e9bdbd5df941ada50b6.png

5aa70e3d0ea05_STC4.thumb.png.63c7e75fdacc32b37c933d72c7511ac7.png

5aa70e3d16243_STXPF1x1.thumb.png.6e31b5d17d1d56e9065cacac64175413.png

5aa70e3d23e8f_STXPF1x3.thumb.png.0148597ecd21a37023506ac93ef00835.png

Edited by Soultrader

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I second what Mister Ed says about taking profits near the previous highs. I think this stock has more interest to the down to sideways side than to the immediate upside at this juncture. Here is a weekly chart of STX alongside a daily chart of it's main competitor Western Digital. I also included a sector snapshot to visually display that that this isn't the most active sector in the market as of right now.

 

This was a nice swing trade if purchased near the swing lows...

 

P.S I'm surprised no one has mentioned the possibility that the large orders could have been short covering by a large entity as well...

 

WDC.jpg

 

STX.jpg

 

DataStoragesector.jpg

Edited by MrPaul

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This spike down could well be what Wyckoff analysts will refer to as Preliminary Support.

 

Chart 2, a 1 point by 1 box reversal shows me some signs of accumulation beginning - after the preliminary supply and 3 point

 

I have just had it pointed out to me that there is a typo in there (highlighted in yellow)

 

That yellow highlighted word should be SUPPORT.....NOT supply

 

Thank-you

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MisterEd....When I grow up, I want to be able to write up an analysis of a stock just like you! I am beginning to see things, but not able to write about them like that yet....Thank you so much. I thought it would catch the next resistance level at around 23.00. I guess I will be watching it very carefully tomorrow morning. Those candles were getting smaller and smaller, so as you pointed out, this could be going sideways for a while and that doesn't make money for sure.

 

I will read your post a few times, as there are a few things I need to reallly understand better. Thank you so much for taking your time on this. And I agree, the free stockcharts seems to be pretty good, I have to take a look at it more, as I have never seen one of them, so I have no clue how to read it. So far only used the bar and candle charts.

 

MrPaul.....funny you mention WDC, as that is one of the other stocks I have been trading, mainly swing trade, but has been pretty good to me so far. Thank you for pointing out the sector as well. I have a lot to learn still, and got stuck with a few stocks, so I have to venture out to learn about other stocks obviously....

 

Thank you both again!

 

Eva

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I thought it would catch the next resistance level at around 23.00. I guess I will be watching it very carefully tomorrow morning. Those candles were getting smaller and smaller,

 

Thanks for the kind words Eva and thanks for the thread - good idea to do these. I think that observation about the prior resistance and the candles getting smaller is spot on.

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Great job guys with the charts. A picture is worth a thousand words. Mr. Paul had a good point regarding the possibility of short selling.

 

The rules are different across all markets but here in Japan trades can take place outside of the regular auction. Block orders can be done right before the open, right before the morning session close, and right before the afternoon session close. Buyers and sellers are able to negotiate a price between themselves. These orders usually get printed on the tape at the end of the day. Personally I always thought this rule was the biggest BS in trading here as the last volume print of the day will force the PVP to shift.

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The charts on my post 11 have disappeared due to a system error (nothing suss!) and will be restored ... just letting everyone know given recent goings-on...

 

I have duplicated this post on the VSA thread with the original charts if you can't wait to see them again... :)

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