Controversially, I don't believe CNP is being capped anywhere near as much as others may think.
All I can see is a pattern of day traders picking up large parcels during early trade and then posting corresponding sell orders a few ticks higher to make a quick buck.
If the price drops during the day, the sell orders are adjusted down to just above the current level, which some are interpreting as 'cappers moving down'. Remember that 1c on 1m shares is $10k so it's a worthwhile play if you can get away with it.
When we get a good SP run, the day traders pull their sell orders because they know they can make more money by waiting. This is interpreted as 'cappers getting out of the way'.
Towards the end of trading, we see any day trader who has not exited a position dumping the stock on the market so as not to hold overnight.
I am not ruling out capping altogether; I saw an obvious case of it by Deutsche on CER whilst Orbis were accumulating. I am just saying I believe it is less prevalent than it may seem.
If CNP was being capped to accumulate we would have seen significantly more volume through instos (see my previous posts which seem to point to around 2/3 of the daily CNP volume being through retail brokers) and we would have seen a sub holder notice by now. The regulatory 5% sub holder level on CNP is around 42.5m shares.
The retail brokers have almost the same number of buy/sell volume each day which indicates shares are just going round and round. In fact, with the exception of a couple I have mentioned in previous posts, there is little evidence to support the idea that any non-retail broker is taking any form of major on-market CNP position at all.
As an aside, the study of mental behaviour has uncovered 'cognitive biases', which are deviations in judgement that can occur in certain situations. A number of these are applicable to us all as stock market participants. If you are interested, details can be found here:
It's all fascinating, but it may be worth reading about Bandwagon Effect and Confirmation Bias which (amongst others) I think are applicable when thinking about HC and CNP.
Finally, having a perception of 'the bad guys' or 'an enemy' who are doing the wrong thing or conspiring against us is a powerful way to rally others. In my opinion, there are no unknown bad guys capping, manipulating or conspiring in CNP - when we look at our trading screen, we are actually seeing each other.
CNP Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
