Trading Analysis - 16th Aug 2018

Alfacomp

17 August 2018

Yesterday's (Thursday) trading appeared on the surface of it to be quite depressed with the share price down for all of the day.

However the nett trade position tells a different story - almost 900,000 more shares were bought than were sold by PI's.

This would appear to make some sense - after all if you drop the price then do not be surprised if you have many people buying. The question is WHY did the market makers drop the price - after all they are going to have to procure those shares that they have sold. There are a couple of possibilities:

1. Assuming, as it seems likely that the 5M warrants block from the start of the week has already been presold, they may know for sure, or simply be very confident, that further warrant exercises are coming. ( After all the 5M presold at 27.8p will have raised 1.40M GBP in funds ahead of time, which is a big chunk out of the 1.6M that would be needed in cash to exercise ALL 11.25M of the Atlas warrants.)

2. Given the relatively recent return of our trolling friends they may be banking on some foolish short selling to provide them with some shares at a lower price. After all it was a year ago, almost to the day, that we witnessed the first of a number of Friday afternoon flash shorts - the Market Makers may simply be banking on, or even encouraging, such similar behaviour. Recent evidence is that PI's here are now too clued up to see this as anything but a brilliant buying opportunity.


 

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