Trading Analysis - 30th July 2018

Alfacomp

31 July 2018

Yesterday's trading started very actively, with the SP moving strongly above 25p within the first 5 minutes:

Evidently the Market Makers took a little advantage of this great enthusiasm, slightly spiking those that bought before 8:15, when they dropped the price to buy back to a much more cost effective 24.8p. By 8:30 the initial phase was over with the Market Makers having sold 400,000 more shares than they had bought. Normally if buying volume dries up at this point they would simply walk the price back down to get the 400K shares they needed, at somewhat less than 24.5p. However on this occasion buying continued, albeit at a slightly slower pace, for the next hour. The relatively small number of c. 150K shares bought over this time period led the price to Buy shares back up from 24.8p to 25.4p.

At this point it is evident that the MMs were able to pick up a large (311K) block of shares - however they had to pay 25p for those shares and they were still 200K short of what they needed. Only following an incredible tightening of the spread at 9:45, with 25.4p being paid by the MMs, were they able to get back to anywhere near nett trading neutrality. In the morning there appears to be no suggestion of any hidden or delayed trades yet to appear. It would seem that Mr 500K and Mr 546,250 were not around to help the MMs out.

The same sort of pattern continued after 11am - continued regular buying, which ultimately pushed the nett trading position up from minus 200K to plus 500K at 4:10pm. There was a brief hiccup around 12:30 when the spread narrowed considerably and bargain hunters were able to pick up shares for only 25.0p but the MMs wised up to this very quickly and then spiked the Buy back up 25.5p. The patient were able to buy later in the afternoon at prices as low as 25.2p. The message here and from the morning is the patient bird gets the worm, whilst the early one gets taken advantage of.

4:20pm was very interesting - there was a very strong buying rally, possibly caused by the chance of news today, which moved the nett trading position rapidly up from +500K to +800K. The Ask had to respond rapidly with again the spread being squeezed to the tiny range of 0.1p. Shareholders were able to sell shares at 25.4p for a brief period before the Bid and Ask were dropped just before the close of trading - expect to see  something like 400K of delayed sells appearing here that would take the Market Makers back to their desired neutral position. Perhaps cavalry divisions 500K and 546,250 were able to arrive just in time to get the MMs out of trouble - we shall see.



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