Today ,Tuesday the 5th Dec at 4 o’clock Knuttie declared that he had 2M shares purchased under T20 conditions, and that these will not be rolled over or sold, but instead fully paid for, regardless of what the share price does:-
My series of T20's between now & new year will be settled & not effectively rolled over & I hope it **** es them off. That's nearly 2m they might have been banking on! gathering in, ha ha they are going to be SHORT.
In the last 2 weeks the Share price does not appear to have responded to typical buying/selling pressure. Instead it appears to have been walked down under the slightest of selling pressure whilst conversely, and perversely, has not moved up under repeated excess buying. This pattern has only been broken by the freewheeling rise of 20+% on the 30th Nov that arose following the news that BMN would be buying out the Yellow Dragon 55% of Bushveld Vametco.
As described in last weeks analysis it may be that the post-YD announcement rise led to the closing of all the independent shorting positions that would seem to have been built up in the previous 10 days. If so then the shorters really acted very promptly – buying c. 1.5M shares in the first 20 minutes of trading on Thursday the 30th Nov.
Of course they were not the only people buying, many LTHs also bought more shares on the back of this announcement and as a result the MMs had to sell 1.9M more shares on the 30th than they took in. If this is what happened then effectively the MMs capitalised on a long position of c. 1.3M shares – selling them at profits of c. 10% and then went further, effectively establishing a short position of c. 0.6M shares that they might have assumed that they could close once they had walked the SP back down again.
Monday 4th Dec 2017
Tuesday 5th Dec 2017
As the charts above for yesterday and today show the Market Makers have continued to sell more shares than they take in. They probably assumed that Knuttie would be selling them his 2M in the next couple of weeks – had he done so it would have been another 20K profit for them and 20K immediate loss for him.
But that isn’t going to happen.
As the charts below show they Market Makers appear to now have a short position estimated at 1.3M shares… and maybe there are some of the original shorters who thought they might try and outlast the 30th Nov rebound who may be still left with open positions.
Tomorrow the Market Makers have a stark choice – when buying continues, and perhaps accelerates, will they simply keep doing the same thing – digging themselves even deeper? Or do they start moving the share price up, and actually try buying the shares that they now know they need? Will the Market Makers or shorters get out first – it may well come down to luck as to whoever reads the LSE board this evening.