Hi i have posted about demand supply indicator and smart money before but thought to share what happened on fridays top 5 price level demand chart.
From around 11am the demand had increased from around 0.7 up to above 2 which means twice as many shares in the top 5 price levels were wanting to be bought then there were to be sold. So pressure on the demand had increased which suggested a likely price move. The price when the demand started to increase was 36.5 cents, i used 4 tick data for the chart but using 1-2 during the day gave about 10 minutes from demand started moving before a price move happened.
The red line is the ratio of buyers to sellers, during the first hour the red line was above the blue line, the red line meant there were more buyers in the top 5 price levels then there were sellers, which means the buyers in the first hour wernt buying big parcels of shares.
When the demand increased and blue line shares ratio went above the red line this meant smart money was entering which is just each buyer wanting to buy larger parcels of shares. Looking at the chart on the top 5 price levels from around 11am till close today smart money was entering, looking at the trades that were going through also you can see that there were some large purchases going through so the buy depth wasnt being manipulated with bids being placed and then taken away before trades went through.
The lower the ratio is for the red line means there is a lot less buyers buying the shares then there is sellers, but the demand of shares was also staying up high which means each buyer today wanted a lot more shares then each seller was willing to sell.
If the red line is 0.5 for example it means there is half as many buyers as there is sellers, if the ratio is 2 at the same time it means amount of shares wanting to be bought is twice as many as the sellers want to sell. In that example that would mean each buyer wanted 4 times more shares then each seller was willing to sell.
That example didnt happen yesterday but there was a time at around 3:20pm where the shares ratio was 2.04 and buyers ratio was 0.7391 so is close to the example above with smart money wanting 2.76 times more shares than each seller wanted to sell.
The blue line has been above the red line on other days but hasnt been for a large part of the day like todays chart except on the 8th and 19th of june where there seemed to be a lot of buying happening all through the day with the blue line above the red line.
This might not mean much but it can suggest there is confidence in gdn because normally people with large amounts of money wont risk it without being fairly confident that they will make a decent amount of money. With the buying today a lot of people are thinking the same to push the demand up to 2 times more shares wanting to be bought then sold during the day.
I had been watching these charts all through the week and friday is the only day during the week where the buying shares ratio was above the buyers ratio for most of the day and looking at the trades there were some large orders going through. The trades are from each seller so its hard to know just how many shares were being bought per buyer but seeing 100-200 000 share trades going through does atleast suggest there are lots that have confidence in this stock doing very well.
If there is no announcement tomorow and the same happens on the chart like on friday it would suggest lots of traders and investors believe the well to be commercial otherwise why would they be buying 2-3 times more shares then there is to be sold if they didnt think the well would be productive.
Im not saying that it is, since no one knows yet but with the increased buying pressure there are more people that would think it is going to be productive over people that think it wont be.
This is fridays chart for the top 5 price levels on the demand supply indicators for market depth.
This isnt ramping just thought some might be interested to see what the buy sell depth was showing on a chart.
Add to My Watchlist
What is My Watchlist?