Extremely low volume today with the trading just kicking over 154,000 shares (Albeit with two hours to run).
The average volume for the last four weeks has been 791,078, which is higher than the average volume for the last 12 months of trading which saw an average of 672,632.
The median volume for the last twelve months sits at 449,428.
Lower volume in RAC trading over the last twelve months has seen slightly more red days than green days. Where the trading volume was less than the median there were 57 red days and 52 green days. On average the share price has declined 2.46 percent on a low volume red day, and advanced 2.75% on a low volume green day.
On the trading days where volume is above the twelve monthly median this pattern reverses. Where the trading volume was more than the median there were 55 red days and 61 green days. On average the share price has declined 4.03 percent on a high volume red day, and advanced 8.46% on a high volume green day.
Nothing too unexpected about bigger swings on bigger volume.
The last twenty trading days has seen an uptrend in volume with eighteen of the twenty days being above the twelve month median. Eleven of those days were red days and eight of those were green days. This goes against the annual trend.
On the days the price rose, the average increase was 4.65%, significantly under the 8.46% seen on high volume green days (on average). On the days the price dropped the average fall was 4.73%, also larger than the average fall on high volume red days over the last twelve months.
So what happened to the volume today? Has there been a small number of big sellers (perhaps only one) over the last few weeks, and has that person stopped selling. It could be argued the increased incidence of machine trading which many have observed over the last four weeks kept a lid on the rises, but also kept a floor under the sales. From the perspective of a large sophisticated seller this makes sense. No point dumping all your shares and causing an unnecessary price drop - it only damages your own position.
Now, lets make some assumptions. Let's assume there has been a big seller, and that seller has been accounting for a significant proportion of the volume being fed to the market. Let's further assume that todays trading is indicative of what supply would look like in the absence of the seller. Take the figure of 154,000 traded (at the time of writing) and extrapolate that out to 4:00pm - that gives daily trading of 231,000.
If we apply the 231,000 shares traded to the last twenty trading days, and subtract that from the actual number sold, this provides a cumulative figure of 11,353,751 shares traded, potentially by a big seller (if my wild assumptions are correct). If this is the case - has out seller finally run out of ammunition and will we see buyers return once they're sure the price has stabilised?
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