Is a happy day today in the stock market with gainers out numbers the losers. Some investors will be happy to see some of their holdings are slowly turning into green. Out of these gainers, there are a number of stocks that are not so positive about their gains today. We will share with you some of the price & volume movements in the 5 mins chart that shows the rebound is not sustainable. You may look into your portfolio to find any of the stocks are having the same price movement like the one below.

High Volume Price Down :

It is a typical operation by the big boys in the stock market to create high price, high volume to attract buyers to queue at the lower price for distribution in the rebound market. 

Usually prices are marked up in the morning during the golden hour (9am - 10am) to create the false impression that the stocks are gaining momentum to go higher or even a technical analysis breakout entry signals to attract traders to jump in. 

By creating price mark up with volume in the morning, big boys are able to attract the technical breakout traders when the price is at the high side. On the other hand, they are also able to give confidence to investors who still need a little push to enter into these stocks. These types of investors will usually park their buy orders at the lower buy price, because they are the types of investors who “go with the flow” kind when it comes to buying shares in the stock market. They will have their own “valuation” of their investment, setting the price that they perceive to be the “fair value”. If the buy order is filled at the lower price, then it is Fate that lets them invest into this stock. 

But the price mark up in the golden hour is just the “Intro” of the whole operation. The climax is when all the investors are taking their “seats” in the market. That’s where the big boys start to throw their shares down to those who parked at the lower buy price. While investors are still enjoying their popcorn & satisfied with their entry into the “movies”. The worst thing is, these investors will ask their friends to watch this “movie”.

High Volume Price Stays

This is typical when the big boys start to see investors coming in to take the queue in the buy orders. They know they have successfully attracted the investor’s attention with the price up & active volume. 

They don’t have to waste any more funds to move the price higher, just maintain the price & create large buy-up transactions every few seconds to add some urgency to buy for the investors, A.K.A FOMO. 

Usually the stock price will not move higher the next day. Because there are enough buyers waiting at the lower price for them to distribute a portion of their shares. 

Summary :

As investors, the first thing we need to know is the intention of every price mark up stages. Will these price movements be sustainable for us to invest in? Are the big boys trying to sell the shares down to the lower price after the price goes up? 

If you don’t have the answer for the questions above, join our upcoming 2 days webinar to get the answer from us. 

The Price & Volume Patterns That Makes Profit & Lose Money

Date : 15 & 17 August 2022 (Monday & Wednesday)

Time : 8:30PM - 9:20PM

Registration Link : https://attendee.gotowebinar.com/register/8087064577957350924

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This blog is for sharing our point of view about the market movement and stocks only. The opinions and information herein are based on available data believed to be reliable and shall not be construed as an offer, invitation or solicitation to buy or sell any securities. Round & Surge and/or its associated persons do not warrant, represent, and/or guarantee the accuracy of any opinions and information herein in any manner whatsoever. No reliance upon any parts thereof by anyone shall give rise to any claim whatsoever against Round & Surge. It is not advice or recommendation to buy or sell any financial instrument. Viewers and readers are responsible for your own trading decision. The author of this blog is not liable for any losses incurred from any investment or trading.