What Happened with Tesco (TSCO.L) Today?

[Perrin 10]

Hi everyone,

 

I was looking at charts today and I noticed something unusual on the UK chart of Tesco PLC (TSCO.L) today (Friday 7th December).

 

I wonder if anyone can shed some light on what was happening here? These charts are from Yahoo Finance. There seem to be spikes up to just above the high of the previous day on numerous occasions today. I don't think it is a recording mistake. But of course it could be. Is it buy orders above the high of the previous day getting hit, for some reason? If so, how? Or is it something else?

 

Any ideas?

 

I'll attach the charts below (3 month, 5 day, 1 day)

 

3 month chart (just giving the bigger picture)

 

 

 

5 day chart showing the 'spikes' up on 7th December

 

 

 

1 day chart as a line chart showing it more in detail

 

[steve46 12]

As I have said many times before, you have to keep up with news if you want to make it in this business....of course if this is your hobby and you don't really care that much, then simply ignore me and move to the next post.....a week ago (approximately) the news came out that "Fresh & Easy" (Tesco's foray into the US market) was unprofitable and later that same week I learned from my own research that they (Tesco) were probably going to sell that business and get out....As soon as investors learned of this (probably a couple of days ago) they started to sell....THATS what happened..

 

Best of luck to you

 

Steve

[TheDude 10]

As I have said many times before, you have to keep up with news if you want to make it in this business....of course if this is your hobby and you don't really care that much, then simply ignore me and move to the next post.....a week ago (approximately) the news came out that "Fresh & Easy" (Tesco's foray into the US market) was unprofitable and later that same week I learned from my own research that they (Tesco) were probably going to sell that business and get out....As soon as investors learned of this (probably a couple of days ago) they started to sell....THATS what happened..

 

Best of luck to you

 

Steve

 

Yeah well thanks guru, but if you don't mind, I'll ignore your idea.

 

Selling on that kind of news obviously wouldnt create that kind of activity the OP is seeking an answer for - it would just create selling - a puke. Being such a guru, I thought you would know that.

 

OP: Dunno.

 

Clearly odd activity. I think the clue here is the odd activity. Some one is playing a game. Buying or selling, I dont know. Maybe others here have better ways of analysing this?....

 

Generally, I try not to predict. I know Im not much good at it. I'd be grateful having seen this activity and put it on my radar/watch list knowing that something is going to happen sooner or later, and be ready for when it shows it's hand - and also ready to reverse as the initial 'move' could well be a false one given there is clear manipulation at play here.

 

By all means listen to Steve the GURU if you like.

 

PS - I assume youve checked against other data providers - google, bigcharts etc....

[Perrin 10]

Hi Steve,

 

I noticed the Fresh and Easy announcement was a few days ago, the day of the gap up (5th Dec). I don't take notice of news that much (perhaps I should), as I prefer to try to tape read (chart read, I mean). I must admit that I do take notice of news on certain occasions when something big happens (big jump up in price, possibly with big volume) that is accompanied by some big news (e.g. company has created a perpetual motion machine). In my view then that's about the time to exit. It all depends on the situation of course.

 

I was wondering more about today, on the 7th. With the spikes up. Like at 9.45 and 10am. The price is at 336 then it hits 341. Then drops back to 336 again. What's the reason behind that? The mechanism, if you will.

 

Is it something like there are no orders between 336 and 341, so those orders at 341 can be triggered? What would you read into those events? Normally there are no spikes like that on any charts. It's a bit like a hedgehog.

 

And I am most certainly an amateur and this is my hobby but I do appreciate anyone giving some time to help, even if I do sound like an idiot sometimes. That's just my style.

Edited December 7, 2012 by Perrin

[Perrin 10]

I wonder if it's just a data mistake or some kind of error. But it is on several charts.

 

TheDude - I just checked bigcharts which is attached below, yes it seems the same from them. I tried looking at google too, seems to be on there as well.

 

 

google chart

 

Edited December 7, 2012 by Perrin

[steve46 12]

Appreciate the comments Dude and if you have a moment....please feel free to kiss my ass

 

Are we clear?

[BlueHorseshoe 10]

 

Is it something like there are no orders between 336 and 341, so those orders at 341 can be triggered? What would you read into those events?

 

I think that you've probably answered your own question there - either lack of liquidity or a large buyer who'll happily chase the market up to 341 but won't pay higher. Try looking at a single tick chart to see exactly how the stock ticked up to that price.

 

As for the reason why - who knows? Stick with Morrissons, that's my advice!

 

BlueHorseshoe

[MightyMouse 12]

You might be seeing an error that was reported from the exchange. The volume doesn't seem to look odd so it might just be an error that will get corrected.

[Perrin 10]

Seeing as it's sunday night and I've got nothing better to do, I thought I'd come back to this thread and post a couple more charts, with my thinking on Tesco as it currently is.

 

Please note that I am just making this stuff up as I go along and if I were you I would not trust me to read a newspaper correctly, let alone a chart. I just felt I ought to post again because I thought it was an unusual set of moves on the chart. And it's my thread and I haven't started many so, why not.

 

Btw, I'm swing trading over days & weeks, (kind of like I imagine Austin Powers might do).

 

Doing this is actually quite good (posting these charts I mean, not the swinging). Just posting a few charts makes me start to understand what people say about having a journal and recording thoughts. I can see how a journal could help focus the mind and improve how you work. Even (perhaps especially) if you're wrong. Maybe I'll start a journal on TL myself one day! Although to be quite honest I do suffer from the concern that you'll all learn my secretive secrets and you'll all trade like me, then my edge (for what it's worth - which ain't a lot at the moment) will get nullified and I'll never become a billionaire. And I want to be a billionaire so I can get a helicopter and fly around town throwing Ferrero Rocher chocolates down to the people below, just like some kind of modern day Santa Claus.

 

Of course, I would buy the chocolates from Tesco. And speaking of which...

 

 

The above 5 day Yahoo FInance chart shows the weird (looks weird to me) spikes up (on 7th Dec) followed by the price reverting to the previous level as if nothing had happened. So the way I think I have this in my head is either:

 

(a) Someone wanted to hold more stock. Price was 337 then someone (big money, for want of a better term) bought stock at 342 (perhaps there were large sell limit orders sitting above the high of the previous day).

(b) Someone wanted to hold less stock. Price was at 337 then someone knew there were buy orders above the high of the previous day, sold stock to them at 342 (perhaps there were large buy stop orders sitting above the high of the previous day).

© It was just errors.

 

I did some thinking during the week and I started thinking it was (b) - that some 'big money' thought price was going to fall dramatically (note that there was the gap up a few days earlier on the 5th, which to me often means that it's time to sell and price may drop back from where it came).

 

So I did think that maybe someone wanted to sell their stock and they saw buy stop orders hovering above the high of the previous day. I thought (speculating now) perhaps they sold to those buy orders as they were big orders compared to the ones which may have been at the 337 level, so they could unload 10's of thousands of stock (for example) rather than just 1000's which they could have off-loaded at the 337 level.

 

Friday 14th however was an up day.

 

 

Seeing Friday's up day made me think that perhaps the strange hedgehog spikes had been accumulating stock instead, because of where price closed on Friday (around 342). On Friday price gapped up at the open to 340.5 then fell, hit support created in the previous few days, then bounced back to 342, where it has spent the weekend.

 

So if the hedgehog spikes on the 7th were accumulation then price might carry on its merry way up (maybe it's already too late to buy though? In hindsight buying was sensible weeks ago, but perhaps not now? Who knows!?)

 

I'll attach the historical data from Yahoo Finance's Tesco data showing the volume & price over the past few days. On the low days (10th and 13th december) - would these be called pullback days? - volume was lowest. Perhaps that means that less people wanted to sell, despite price going down. Volume is higher on rising price days.

 

 

I'm still struggling with all this myself and it's hard to put things that I see into words, so forgive me if I'm wrong, after all I'm just making all this up as I'm going along.

 

Ok, so what I'm going for is (a) it's accumulation (and/or less selling) and this coming week Tesco's going to go up more, and there'll be some news release about how Tesco has won a contract to supply a huge order of chocolates to a mystery customer. This will move price up higher (perhaps another gap up - although I think this would be unusual so I can't really imagine that happening (saying that, I did just imagine it, so, meh, whatever)). If there is a renewed push upwards it might not be long lasting though and I'm not sure I'd want to buy now, perhaps it's just going to be somewhere for big money to sell. Though these things are fluid aren't they, and can change day by day.

 

Of course, if those spikes on the 7th were just errors then I think up is still the way that price may go, based on Friday, and the lower volume on the declines, and the fact price is kind of butting up against the highs around 342 of the past week or so. However I am also very wary that we just recently had a gap up which, as I said before, quite often makes me say 'thanks for that, cheers, I'm outa here'.

 

Anyway, that's my Sunday night homework done, all that's left to do is review later in the week to see what grade I get. Hopefully price will go one way or the other rather than sideways, so that I can get an idea of what happened when it was doing the weird hedgehog spikes (if indeed it was doing anything).

 

I have been writing this stuff for over 2 and a half hours. The adverts are mocking me: "Trading is simple! Make a squillion dollars trading in your lunch hour with no effort at all!! Learn how to make £40,000 trades with only £100! Without the hours of studying!" Well, indeed. It's 2.30am. I'm going to bed.

[SIUYA 11]

IMHO - you are complicating it.

confusing the spikes (which are unusal price action either due to an error of reporting, or some algo, or other reason for purchasing through multiple price levels), v the reasons for the underlying fundamental news

 

Dont think that market participants know what others are doing, or that you can work out if someone is accumulating stocks, exiting longs, or shorts, adding to positions, reducuing, initiating a new position......generally we will never know.

they might be new players, private equity, index huggers, and overseas buyer, option hedgers, a local fund, anyone with any number of reasons......

 

Plus dont forget that these are not futures. Stocks have a finite number of shares on issue, and so there are different factors involved, different players and you might need to look at the free float of a share. (Though with CFDs you could probably have more than the number of shares on issue traded out there..)....

 

regardless - are you interested in the spikes?

or are you interested in the recent news action?

or are you interested in a longer term trade based on the fundamentals which have been changing?

 

Plus - regardless of what Steve says (he effectively implied he had inside knowledge if his own research can show information (without guessing) prior to market releases of what a company will announce)) and even all this is merely speculation about what may happen and more importantly to you - what the market reaction may be. Remebering the market is often good at digesting information hence the rubbish about efficient markets.....

Point is - are you trading or investing, or trying to analyse the market based on prices or fundamental action......they will confuse if you are not clear on what you are trying to get to - especially at 2.30am

 

I do look forward to the helicopter chocolates falling from the sky.

[Perrin 10]

Hi Siuya

 

I just read through my post again and it was too long. Note to self - don't write posts at 2am. Although maybe it had to be that long as it was my thoughts splurging out onto the page.

 

My reason for starting the thread was to see if anyone knew why the hedgehog spikes happened, there wasn't a definite answer so over the weekend I decided I would try to be Sherlock Holmes. I know I won't find out what actually happened, but if I see what happens following the spikes, perhaps it will give me some insight into what the spikes were about. Though I might well be reading too much into the spikes on the 7th. I should probably scale-back my thinking about it. I do have other stocks on the go, but the reason I singled this one out is because of the weird spikes.

 

My interests in TESCO:-

 

Interest 1 - the spikes on the 7th Dec.

I am interested in them. I was thinking that it was an unusual thing to happen, so it might lead to an unusual result (e.g. a big jump up in price). It still might (This morning it's gapped up a penny, again.)

 

 

Interest 2 - recent news action.

It's not that I am that interested in the news itself, but more so that there was an 11 pence gap up recently on the 5th Dec and the price hasn't fallen back down to cover the gap (yet). I've been in positions before where I bought a stock, the stock gapped up (or ran up fast), I hadn't sold, then price came all the way back down again.

 

My current thinking on that kind of situation is that if I have a good profit after a big movement up, I should take the profit. (But at what point, everyone asks! Ah that's the trick, isn't it!) I do wonder if there are circumstances where I should hold on despite a big move up. Like, for example, now (?) when there are retracements on lighter volume. I am thinking to myself, "is this a case to hold on? Or, because there was the big gap up, is it time to get out quick ?"

 

 

INTEREST 3 - General analysis of volume & price over the past few days.

Because of my Sherlock Holmes behaviour, I noticed that yesterday, on Monday morning (17th), the price went down and then bounced off support and ended up about where it started, on low volume (9.8 mil compared with the 3 month average of 22 mil). In the current situation this feels bullish to me.