CliftonSlvers@CliftonSlversI am still working it out to be honest . But my current ideas...on those two scenarios mentioned are .
1. A bigger player is plunging the share after a rise that was caused by a pump or an announcement (even though he holds). What is happening here? The pump comes before the big player is ready for it.
if there is volume in the pump, the big player may let it run, as far as he can, mark the price up beyond the demand, and then sell a largish parcel into his marked up price. He then plunges it (even though he still holds a lot of shares), in order to buy his parcel back lower, and
to adequately finish preparing the chart to SUSTAIN a rise - a bigger rise than the one just experienced. (It has gone up, because of a pump, or an announcement) ,before he has finished his preparations. He needs to make sure that the share is tightly held before the major rises. Only the committed get to come along for the ride, and he wants to buy up all the shares from the loose hands.). So he's
mopping up the available supply, and making the general trader too anxious to buy (because of the plunge) . The share price always comes back down eventually, to his accumulation range- and it can take a long time , depending on how strongly held it is by those who bought in, in the pump. Daytraders don't hold tightly - so it can fall pretty quick when the demand is coming from daytraders. All you have to do, is hit their stop losses , and they are out. The big player brings it back down to his accumulation range , finishes
accumulation and finishes preparing the chart to sustain a sharp rise. So I would be looking at - has the preparation to sustain a sharp rise been COMPLETED prior to the rise, and is the big player soaking up the supply as the share price is plunging back down after the rise.
2. When it is the big player is selling into a top ,on the basis of a pump or announcement, the
preparations for the rise would have been completed before the demand appeared
, and the big player is notmopping up the shares on the way back down from the rise. So you look at what happened before the pump, and what happens as the share price falls after the pump . It is the context of the rise . Was this rise a part of the big player's original agenda? What was he doing before and after the rise. Volume would probably be useful. I look for preparations for a sustained rise , using my choice of indicators. Mine aren't special. I just put time into working them out. Before a share can break through resistance and sustain it, it needs to be prepared, anything else will be a bull trap. Other than that you study to know what your personal indicators are for a top, on your chosen time frame. If you don't get the signal for the top, then it is not the top. Hope something in there helps.
