I PREFER MY STOCKS SHAKEN, NOT STIRRED
As I scour the market each day the ones that look beaten down and on the skids may be set for a move. At first this sounds ridiculous since there may already be one foot in the proverbial grave already. But I like to gamble and usually I do it on the trading pattern.
Stocks that deliver bad news go down, that's a no-brainer, however, figuring out which ones will bounce takes some skill to recognize as investors go through the shake and bake process. When someone or group comes in to stir up a stock (pump and dump) the bullboards light up and magically this happens right after a few big blocks were purchased and the brass band starts to play. The funny thing is there is no big buyers only small retail spotty buys followed by lull and more and more grandstanding by posters claiming a big reversal is in play. But the company typically is dormant and hard to contact and there is no recent news to suggest this could be a good investment.
Now on the other hand when a stock runs with looming news and then goes through a process of shaking out traders, then I tend to want to engage this story and throw some money in for the ride. It's all still a gamble but when bigger players do the bait and switch on level 2 and try to walk a stock down only to clean up any new sellers, this usually means you were just shaken out of your stock. The guys doing the shaking may be onto something or they just want a bigger piece of the pie in case it's good news, but usually they have a line of communication that gave them the wink and the gun.
Now some readers are shocked, you mean to say some traders or groups have information not easily available to others? Well the dirty truth is some information may get leaked inadvertently, however I still believe a majority is just good investigative work. I have spent a majority of my life investigating criminal activity and protecting others from harm. I rarely take things at face value and my personality drives me to question every fiber of fact presented. I also think logically about a certain course or outcome that would make the most sense given all the contributing factors to the success or downfall of a company. There is no Santa Claus saving companies but there are many 11th hour deals that don't show their face until after you seemed to have sold and moved on.
So what's the moral of this story you ask? Well I think you have to go fact finding and then stick to your guns. The market optics may look bad but someone may be very good at painting bad optics. The same reality holds true on stocks running as it does for stocks falling. If I throw up 100,000 shares to slow the market and then the stock retreats and I add more shares at a significant discount, then it was worth the risk of losing those 100,000 shares. It's interesting how some traders will throw up a million shares for sale in front of an upward trending stock and then it reverses. If I really wanted out of a story the quickest way to guarantee you won't sell is throwing up a block like that right? There are a lot of games being played and the stock that's silent and running is the best story. There was no pump, no one even knows who this company is yet the buying is relentless. I want in!!!