No doubt the past couple of weeks has taught us how the market...

No doubt the past couple of weeks has taught us how the market can be influenced by big traders, there is a lot of new capital at stake should the options not be "in the money" sometime say early to mid September.

So the share price appears to have been gradually lifted without over-exciting the market. The recent ann certainly increased volatility and drew in enormous numbers of day traders. So now the challenge is to reposition or at least hold the price levels in anticipation of the next round of news.

Raises the strong possibility of price manipulation, just a glance at the buy side at .17 and .175 and on the sell at .185 might give traders a million or so hints as you what the desired range might be. Just an opinion of course :)

Following is a post placed previously on a relevant issue (credits go to the relevant posters below)...

Capping:

1. The practice of selling large amounts of a commodity or security close to the options expiry date in order to prevent a rise in market price.
2. An attempt to keep a stock's price low or move its price lower by putting selling pressure on it.

Most of share traders or investors have perceived that definition number 2 was in play at one time or another, where a rather large amount of shares are put up for sale, just above the trading range, forcing impatient sellers to go beneath that price.

The capper, it is thought, then picks up those shares because his intent was never to sell the amount of shares up higher, merely to obtain more shares cheaper. Sometimes this is not the case, however, and a seller simply wants out and puts perhaps their entire holding up for sale at the one time.

The true test of a capper often comes about when his capping shares are threatened with being 'taken out' (i.e. someone thinks they are good value to buy). He then removes the shares - indicating there was probably never a serious intent to sell those shares in the first place. In other instances, we have observed that the capper is outsmarted and his shares are in fact purchased by someone else - usually a large buy order in one hit.

How to identify a capping?

Simply look at the market depth, the amount of sellers in the list and the obvious signs of 1 or 2 major sellers that have extraordinary sized share parcels sitting there. Also look at the price points above the perceived "capper" and see if there are any more large parcels on offer by a single seller. Then look for on the buy side to spot any "proppers" that are there to hold the trading gap in share price forcing the buyers and the sellers to exactly the same price level.

Can they work for us?

Capping can work to our advantage, if we wish to obtain more shares. By forcing impatient sellers to move to a lower price, we can, in fact, enjoy the benefit of the capper's work and sit in the queue waiting to collect those shares.

Cappers can also give us the insight to the favoured purchase price of the stock for accumulation (assuming the capper is real). When the capper have had their fill they will disappear, but again, they have a lot more patience than we do. If the share price is being held and the volume is increasing then in might be a buy. This is because the cappers may be able to contain the price but it will be impossible for them to hide the volume. Sentiment indicates that rising volume and accumulation with a stagnant or held share price is the perfect time to buy.

Parts of this article .. tangrams and kse3137