Is anyone out there who is good at reading accumulation? Do you think the bot trader might actually be trying to accumulating shares?
Here is a possible scenario.
A big buyer - maybe a fund - wants to buy into CST. Maybe say 2.6 m shares
The buyer can't buy on market - CST is one of the most illiquid stocks on the market.
So the buyer looks to see who own a big swag of shares and might be interested in selling some.
Turns out to be the directors/bosses are the big share holders. It's a bad look for a boss to have to announce he's selling shares in the company. But maybe the bosses say , "Well, maybe we will sell you half your pile - but you'll have to buy the rest on market."
The bosses like that idea because someone buying a million shares on market might create some buying pressure- and therefore be good for all shareholders.
The buyer isn't so pleased though - it's going to be hard work to buy a million shares on market.
The buyer says to CST bosses:
"OK - but please don't tell the market that we are still buying. If the market finds out we are in the market buying more shares, that will drive up the share price."
CST bosses say " OK! We'll just announce that we've sold some shares."
So the buyer buys half the stash - and then sets out to buy remaining half on market.
The buyer does this by using bot trading - where the buyer is both buying and selling, trying to sometimes drive down the price to flush out some nervous sellers. The buyer will then soak up whatever he can get without driving up the price too much. Maybe he will put a sizable order on at $3.27 to scare some sellers into selling below that figure.
each day he does his bot trading game and each day he gradually acauires more shares. it's going to take him a while, and he can to be clever to accumulate shares without driving up the price.
He has 1.3m shares to buy - if he can pick up a net 50000 shares a day, that's 26 days for him to get his order filled.
--There is another possible twist to the bot trading thing. The buyer used his bot trading game before the big buy - to try to drive down the share price - to help get himself a good price - and maybe to pick up some shares on market .
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that is the scenario. I just made that up - because it is kind of plausible!
What I'm wondering is how to work out if this scenario is actually happening.
Can anyone who is good at reading on-market sales and bot trading and accumulation signs tell me if there's any support for that scenario?
For instance, you'd expect the daily volume after the big 1.3m share transaction to be higher than before the bot trading was happening - if accumulation is happening each day.
One thing I did notice was that immediately after the big share transaction went through, a big buy order at $3.15 appeared in the market depth. Then it got pulled. --
perhaps people could watch the individual intraday transactions over the next few days to try to work out whether there is any evidence of a buyer soaking up shares - and post your thoughts to let me know!
If definitely looked like CST's price was being pushed down this morning and buying was happening late today.
CST Price at posting:
$3.27 Sentiment: Buy Disclosure: Held