AMI TradesGood evening folks.
If you go to the above link or the 'Course of Trades' in your own share market platform you can see how algorithmic trading manipulates the price both on the ASX & Chi-X. You can see the single share trades or very small parcels deliberately testing the lowest price throughout the entire day and successfully pushing down the share price.
For those that have flash trading programs who can see which brokers were trading it, could narrow down which funds are engaging in these 'death by a thousand cuts' trades.
I think this is all about the ability of institutions to trade shares based on volatility and really has little to nothing to do with the fundamentals of our company.
I have some generally available data below that might help with what I'm attempting to explain.
Just out of interest, the Price v Average Target Price of the brokers, AMI is 32% undervalued.
Net Tangible Assets per share is 27c. Intrinsic Value is 86c.
Volatility is a measure of how much the share price moves up or down and while it's trending is 67.2%. Huge!!
The Average Trading Range Daily (ATR over the last 14 days) is 2.5c which means it moves on average 2.5c from top to bottom over the last 14 days which is 5.2% of the share price. (Better than bank interest!)
The ATR Weekly (over the last 14 weeks) is 7.4c so it moves on average from top to bottom 7.4c a week and as a % of price is 15.2%. So that means on average it's moving 15.2% a week!
These ranges present exceptional and predictable trading opportunities for instos to make substantial percentage gains. The constant lending and borrowing of shares between subsidiaries in some instos drives the direction of the volatility at the time. Which right now appears to be in a downward direction.
Why then don't the instos push the volatility trend higher towards broker value estimates? I don't think there is no hurry for them to do so. The last conference call gave the production estimates for the forward year, timing of mining Kairos high-grade ore and we won't get Q1 production results until the end of October. If we get an unexpected exploration announcement, the trend can be pivoted to the upside and the all important volatility remains.
So I suggest the share price at the moment is really based on the ease of algorithmic trading to capitalise on the volatility of the shares rather than fundamentals.
Just my thoughts. We love to hear others.
All the best.
KKR
(20min delay)