volume

When reflecting on what happened lately on the heels of 2 great announcements which caused very brief rallies and rapid exodi of traders, I do have the notion that traders are not entirely to blame for this behaviour.

Typical trader activity would involve a second run up, particularly when a third of all available shares were traded in a single day.
Remember the waves previous rallies created, they lasted days and eventually ebbed down on day 3 or 4 with several reoccuring spikes.

Now that we had the largest volume day ever on OBJ we are thrown back to almost the level prior to the rally within 2 trading days.
In my opinion, what made me comment after the FMCG rally which got crashed in a similar fashion, again raises my suspicion.
Traders would milk this situation for a longer period, there would be too much money to be made, particularly with such an upbeat and enthusiastic shareholder base supporting renewed buying pressure.


Exiting traders in both incidences sell back into the hands of somebody who is buying it.
The last 3 days combined saw almost half the shares on issue changing hands with price ending up where it started.
This behaviour would make sense if ann would not contain any information of substance and market would be in a boyous mood to rally an almost anything.
Both is not the case.
Ann opened up a completely new chapter for OBJ, same as the previous one.
We finally are talking about partnerships, fully financed testing programs by partners, Alliances and royalties.

Im sure many wonder why market squashes both rallies effectively down in such a short period.
The explanantion that market is disillusioned about OBJ as a company does not explain this to me convincingly, market runs where it can get money, regardless.

I suspected control of share price after previous rally and am convinced of it now after this one.
Fair enough to say that traders exit, everybody can see that. But why does this happen so abruptly and why regardless of content of ann, tossing away the opportunity to reel in further gains?

In my humble opinion, share price is held down.
This is easy to achieve. In quiet periods shares are accumulated ( the whole month after the FMCG ann ), half of those are dumped at the height of rally which breaks confidence. This way the accumulator does not only sell at a good price but also can buy back later cheaper when traders start selling into him waiting on the buy stack.
I usually dont like theories like this as they come accross as too complicated, but the extremely positive content of both anns leaves me little leeway.

I was impressed how share price deflated quickly after the FMCG ann but am even more stunned how it worked this time round.

OBJ is often pushed lower prior to anns. We just had a perfect example of this prior to the quaterly.
This share price, in my opinion, is pushed down in expectation of the next announcement.