Who's selling?, page-5

In Reply to ResourceEagle (HC quoting bug)

I would imagine it's mostly UBS selling. They seem to employ heavy algorithmic trading across all stocks. Not sure what their algorithms are based on but GLN follows the All Ords & S&P 500 more so than any other Lithium stock. If GLN moves against the market they will buy or sell until it moves back into line (UBS are typically 30% of all trade).

Look at the correlation between GLN (red line) and the All Ords (green line) and the S&P 500 (blue line). The bottom 2 graphs show extremely high correlation (hovering around 0.9 most of the time) between GLN and these 2 indexes (again the green correlation graph is the All Ords and the blue correlation graph is the S&P 500). In the case of the All Ords there was just the period from Oct 21 to Mar 22 (inclusive) where there wasn't a strong correlation.

What does this mean? I think GLN is still not well known/understood - every time you see a list of Lithium stocks on Twitter, for instance, GLN is rarely on it. So there is not enough volume/interest to shrug off the direction that is set by the algorithmic trading. The retail trading is then heavily influenced by the momentum that is set by the algorithmic trading - which then reinforces the trend/direction. I'm not sure about all this, just speculation on my behalf. If this is the case, I know that it won't last forever. As they say markets in the short term are a voting machine, in the long term they are a weighing machine. GLN is just not good at the voting part (the popularity contest), but we all know it's a heavy weight.

Oh well... it is what it is, until it isn't.



Below is a sample of the same analysis against some other Lithium stocks. You can see that the correlation is there but nowhere near as strong and consistent. Of course, you would expect some level of correlation between any stock and the overall market. It's just that the correlation is so high with GLN it just doesn't seem to have it's own identity, not yet anyway.