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Skullcandy, Inc. Message Board

  • armpit9007 armpit9007 Nov 15, 2012 7:02 PM Flag

    What happened today?

    Trading frozen for over 3 hrs. at 8.71. It almost looked that trading was suspended. Any concrete news? No speculation please.

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    • Forgive me armpit, but it's late and you haven't gotten a response so I will take the liberty to speculate. Please humor me and refer to a 30-minute chart of Wednesday and Thursday's action.

      Assume I'm a trader for a brokerage and I see that selling has dried up. I get approval to run a 2-day campaign with 100,000 shares. I start by selling into Wednesday's open to drive the price down to 8.30 and then I start buying. I didn't want it to go lower than 8.27 because that would discourage the specs and encourage the shorts, who I will need to sell to on Thursday. I buy all the way up to 8.40 at which point I sell in order to keep a cap on the price. Also, I can't let it go lower than 8.34 because then I have to compete with the home-gaming traders looking for a retest of the low. So, I'm buying at 8.34 and selling at 8.40. But, I'm mostly buying, selling just enough to keep a lid on the price. 30 minutes before close I manage to accumulate 100,000 shares at an average price of 8.37. So, now that I'm done accumulating, I juice the buying and allow the specs and shorts to buy up the price, and up it goes to a high of 8.57 and a close of 8.47. Now, the shorts are worried and the long specs are thinking they're missing out.

      I buy the Thursday open and I get help from the shorts and specs. The price rises and I start selling, selling up to 8.74. Now, normally I'd expect to have to support the stock, say at about 8.57, Wednesday's high-volume high. But lo and behold there are buyers at 8.71. Maybe the shorts are worried about a Wednesday repeat. So, I sell into them.

      So after about an hour of this I stop selling and let the price rise and then selling pressure comes in at 8.80 and drives the price back down to 8.71; an upthrust. Now I know I can't sell higher or I'll be competing with the great unwashed. But SCHMIDT that cost me, thought I could go home early, but the shorts and specs see the upthrust and back off from buying, in fact fear comes into the market, and I have to buy, buy, buy, to keep the price supported.

      And so, with the selling fear subsided, and the shorts and specs back to thinking about a repeat end-of-day rally, I continue to sell out my inventory in that tight range 8.71 to 8.73. With about 90 minutes to 2 hours of trading left in the day, I'm done selling and the price is free to rise again, this time to 8.81, the unwashed sellers come in and drive the price down. Like before the shorts and specs see the upthrust and the price starts dropping, only now I'm not there to support it, and so it continues to drop until real demand comes in.

      • 1 Reply to onepoint272
      • My fictitious firm made a minimum profit of about $35,000 in two days. But for those of us who follow the money, the most important information happened at the closes. Note that the Wednesday close rallied on 154k in 30 minutes and Thursdays closing drop was on only 62k in 90 minutes. Not even close; the force is up.

        That last 30-minute bar on Wednesday is a buying bar and SKUL is NOT a sell until two things happen. One, that buying bar gets taken out, that is, the price closes under 8.33. And two, if it gets taken out, it is still not a sell until the 8.33 gets retested from below on lighter volume.

        We've closed above the pivot 2 days in a row now; the start of an uptrend and we also have volume up at 8.71, a price magnet. The closing 30-min stick stands above a 61.8% retracement between 8.27 and 8.81. That is a normal retracement. The AB=CD with A=8.27, B=8.81, and C= 8.44 puts D at $8.98. A 1.272 extension put D = $9.13. With option expiration on Fryday, don't you think $9 will be challenged? I do.

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