Hey Blogsrule number one is don't loose your capital. Therefore...

Hey Blogs

rule number one is don't loose your capital. Therefore stops at market triggering other stops would account for quite a bit of yesterday's volume I reckon. Nobody would have expected such a steep drop and most people place their stops around support levels.

The fact that this is so common is a tactic used by traders with large accounts all the time in order to pick up shares cheaply.

Then into that you have to take account of the psychology of the market. Many people will wait to see the trend reverse before getting back in. Others will take advantage of the low prices to pick up more shares.

The fact is though that price shocks can hurt badly and particularly if you have a largish position. This is why it makes sense to use stop losses even if they are a generous multiple of the average true trading range.

I would expect the price to recover once it stabilises and then with some positive news I expect it will head north again.

In the long run this short term down trend won't matter so long as management deliver.