Today's closing auction

[alleycat]

I have watched the JustOneLap file regarding the closing auction process but today,s closing price on Aspen has me fuddled with regard to the share price action where the price opened slightly above yesterdays closing price, then climbed over 2% during the day and fell back to yesterdays closing again just before the auction.Come the auction, the price rockets back up 2%. Please help me to understand what happened here and why the orders were not matched during the day. Too many buyers or too many sellers or visa versa ?? Thanks

[Rams]

just before the auction(15.30 to 16.30), the DOW was in free fall and just before the auction(16.30 to now) the DOW was up.....so whats APN to do? Even if Gadaffi becomes SA president, the ALSI will be up if the DOW or SP500 or FTSE is up!

[Rams]

but you dont have to go looking at SP500 and DOW etc because the big picture on international charts is reflected on our charts!Its not being manipulated by Pravin if thats what you want to know

[Preston]

Too many seller less buyer --- price falls. Too may buyer less seller, price rises

[Rams]

yes, in essence thats what it is and probably all that really matters, the price. why it falls or why it rises is not relevant. but dont try to figure out why we go down suddenly at 15.30 when we up the whole day...

[alleycat]

Thanks. I understand the effect that international markets will have, but on this specific share, the price rose steadily until about midday and then fell steadily back to it's opening price. At 4.50pm the share price was back to opening price. Within the 10 minutes of the auction from 4.50pm to 5.00pm the price increased dramaticaly to almost it's midday high again. If the purpose of the auction is to ensure a fair closing price which should be fairly close to the pre-auction price how is it that the price soared 2% within 10 minutes? Am I understanding the auction process properly?

[sponono]

the closing auction is influenced largely by the balance between buyers and sellers (volumes). the higher the buying volumes at market price the higher the chance the price will rally at the close. dont worry about what the price was at 16H50 because that is completely irrelevant for purposes of the closing auction. take a few stocks during the closing auction and compare the buy/sell volumes and you will see what I'm talking about

[alleycat]

Hi sponono. I have seen the high volumes go through during auction but is the auction not there to prevent a certain "manipulation" of the price in relation to the pre-auction price? Today's closing (9392) on Aspen is in line with the pre-auction price (9392) but yesterday's pre-auction price was (9100) whilst the auction of 10 minutes shot the price up to (9280). It just seems that there was a heck of lot more trading done during those ten minutes than the rest of the day. I guess it's because I went short on Aspen too early that I am trying to justify my trade. Thanks again.

[sponono]

would be interested in ure technical arguement for shorting a stock that has broken out of a trading range to the upside

[Russ]

Agree with Sponono.

[alleycat]

Well the reason for this post is that the breakout occurred in the auction and if the closing price had remained within the area of pre-auction, a candle shooting star would have shown instead of the strong breakout. There was also divergence on the RSI for the period 8/9/11 to 27/10/11 and the Relative Strength was weakening. MACD had already turned down and there was also divergence on the Momentum indicator.The Stochastic was also bouncing in the overbought level. I know I should have waited for confirmation before jumping in and would appreciate further insights.

[Russ]

I would have been watching for a breakout of the symmetrical triangle that had formed over the last 6 weeks or so.It closed above the upper resistance of this triangle on 27 Oct.That resistance also appears to be the neckline of a reverse head and shoulders which has formed over the same period.It has since come back twice to test the support (prior resistance) and both days closed above it.I guess it is best to work on closing prices rather than intraday.I agree that it was overbought but some forumites don't seem to think that this is very important.Certainly a share can sometimes stay overbought for quite a long time.I think at best it might pull back to about 92.20 but I will be surprised if it falls lower than that.

[Rams]

This is all retrospective... but 2 points that come out of alleycats posts:1. Dont short anything when the US markets are up and 2. Dont short ASPEN. You can sell your long on ASPEN(when overbought) and buy back on a pullback but dont short ASPEN. Same with CAPITEC or Mr Price..

[Rams]

This is all retrospective... but 2 points that come out of alleycats posts:1. Dont short anything when the US markets are up and 2. Dont short ASPEN. You can sell your long on ASPEN(when overbought) and buy back on a pullback but dont short ASPEN. Same with CAPITEC or Mr Price..

[Preston]

I found it rather amazing when to short a share via SELL SSF ,it unleashes the world greatest demand for that share. Unbelievable!!!

[#16]

There is more than one trading strategy in the world guys and girls. I am sure you can find a trading strategy that advocates shorting aspen. There was a strategy I once saw called turtle soup - which was a reversal of the famous turtles breakout strategy. Turtle soup tried to capitalize on the 60% odd of failed turtles breakout transactions.

[sponono]

turtle soup? what about lone soldier approach?

[Russ]

Hopefully that was the pullback to support and it can now continue upwards.