sharp fall, page-2

Hi blackstump,

I dont own CDO but it is on my watchlist.
I noticed the sharp fall and believe that the sell off was due to a high number of stop-loss limit orders being triggered once the stock hit $4.50.

As you may be aware, Etrade and Comsec are offering a stop-loss service. As you may also be aware regarding the Comsec service, they stipulate that even though you put in a stoploss order at say, $4.50, they cannot guarantee you a clean exit. Because of this, you may have noticed some other sharp falls in stocks such as BBG.

BBG got stung when a major stop loss point at another round number was taken out - namely $7.50 on 15 April.

I would suggest that stock registers of companies such as BBG and CDO are heavily weighted towards retail investors and that this "panic" selling by such investors/amateur traders, once a mechanised stop-loss is hit with a major online broker such as Comsec, is the cause for a "kangaroo tail" bar on the stock chart.

That aside, CDO has had a good run and todays events give holders of CDO stock such as yourself, a strong and clear signal of the fickleness creeping into the minds of many other shareholders.

Regardless of whether or not you believe todays sell was justified or not and regardless of whether my explaination for the sell off comes close to the truth or not, the writing is on the wall and the charts tell all.

What it is telling us is that there are many holders of CDO who are extremely keen to lock in profits - possibly between now and June due to tax reasons - and I believe we will see stocks like CDO come off their highs as people rebalance portfolios between now and June 30.

Cheers