Yesterdays trading the buy side was staying above 1 at around 1.5 times more on the buy side then sell side for the top 5 price levels.
Until around 12pm smart money was entering not in large amounts but buyers were buying more shares then sellers wanted to sell which is always good. This changed after lunch and the blue line was above the red line at different parts of the day but was constantly going above or below the red line throughout the afternoon. It doesn’t mean that they are selling out, just means that the buy side has more buyers to make up the amount of shares to purchase, so smaller investors traders would be buying in
Looking at the 8 price level chart it suggests something different with the blue line being above the red line for most of the day on the 4th july. When the blue line is above 1 on either 5 price level or 8 price level it suggests that the buy side is in control since the buying pressure is there.
On the 4th july there was buying between 0.405 and 0.435 cents, with the average buying price the biggest at 0.435 and 0.43 during the day and the average price for the days trading at 0.425. Since Monday the 2nd july the average price over the last 4 days has been around 42.5-43.5 cents which suggests lots of investors/traders believe 42-44 cents is a good buying price for gdn on expectation of news soon.
Today’s chart shows very little smart money entering because the red line was mostly above the blue line, this only means there were lots of buyers so the average amount of shares per buyer in the top 5 price levels was lower or equal to the amount of shares per seller was selling. Even though the smart money wasn’t entering today, the demand was still in control on the buy side. On the chart for today you can see the blue line had dropped down to 0.25 at around 11:20am this meant in the top 5 the amount of shares on issue on sell side was 4 times more than there were on the buy side. It didn’t stay at that level for long since you can see on the chart from 11:30am the demand increased up to 3:30pm where it reached a high of 3.1137, so even though the smart money wasn’t entering the pressure on the buy side was increasing over the 4 hours from 11:30am which means there are lots of people still wanting to get in at the current price levels. This cant be traders buying and selling since there isn’t really any profit to make unless buying in very large amounts since the last 4 days the trading range is between 40-44 cents.
The idea of the smart money and the demand is, the demand shows when the buying pressure is increasing or falling and normally a price move will follow in that direction sometimes it may take a day before the price moves in the same direction as the demand and other times could be 1-2 weeks, its just to suggest which way the price should be heading in the near future. The smart money is when each buyer wants more shares then each seller wants to sell so if it was a ratio of 3 it means for every 10 000 shares wanting to be sold a buyer is wanting 30 000 shares to buy, that’s why the shares ratio is divided by the number of buyers ratio which they are both worked out by the shares on buy side divide by shares on sell side if more shares on buy side the ratio is above 1. The number of buyers on the buy side divide by number of sellers on sell side gives the ratio between the 2 and then those 2 numbers are divided to work out if smart money is entering and anything above 1 is considered to be smart money. Even if both the blue and red line is under 1 on the chart as long as when divided between the 2 the amount is 1 or higher then it means each buyer is buying more shares then each seller is prepared to sell.
This normally happens days to weeks before any real strong buying starts entering to make sure they have their amount of shares they want at the cheapest price before any price moves. An example of this was in August last year for gdn all through the month smart money was continually entering each day and in October they had all their shares at under 30 cents before the run up to over 1.20.
You can work it out by looking at the top 5 price levels and doing the calculations but the chart just makes it easier to see what is happening during the day.
Having the demand above 1 is always a positive for a stock since it suggests buyers are wanting more shares then sellers want to sell so buying pressure would be building before any price move. If while the demand is increasing can also have smart money entering it means there are buyers that want a lot more shares then sellers want to sell, and people don’t throw large amounts of money into a stock if they don’t believe it will go up.
The last week we have seen smart money entering and demand is also been above 1 and on some days up to 3-4 . Seeing this happen has to suggest that there is confidence in the well flowing at decent amounts. This didn’t happen when share price was low 30’s so people must of thought the testing that was to start in the week from 25th June would end up being a positive result since the buying and smart money was getting bigger on the 29th of june where the price went from 0.375 to 0.425. This also continued on the 2-3rd July and smart money hasn’t been entering today but demand was still there. On the 4th July demand at its highest only reached 2.5 and today’s trading demand reached 3, hopefully tomorrow we will see the demand side get stronger then the sell side from today’s trading.
GDN Price at posting:
0.0¢ Sentiment: Hold Disclosure: Held
