Arnie:
Switch your intraday chart to 15 minutes which should provide 3+ days of data. When viewing the nextel chart from his perspective, we have a very constructive pattern developing. After the 4 point gain to 34, nextel retraced approximately 1.5 points. From that point on, there has been a continual and steady rise to the close of 33.75 Friday on declining volume. Normally, the declining volume would signal the fading of the current run. However, when taken in the context of the extraordinary run up on enormous volume following the addition of nextel to the S&P, this is not the usually set of circumstances. Looking into the future, it is going to be somewhat more difficult to portent the actions of nextel because of this development. In all probability a good deal of nextel stock has been removed from the float as the index funds have included a proportionate amount of nextel stock. In this context, the 3.7 million shares is a high amount of trading and the strenght of the share price over the past three days is a good indication that nextel is getting ready for the next move up.
It can be expected that the mm for nextel will do whatever they can to manipulate the share price of this stock to their advantage. When their inventory is high, they will artifically bring the price of the stock up to create the demand necessary to either start a run in order to unload stock at a profit. When they need stock, as they have this past month, in anticipation of the current rise, they will drop the price of the stock thru stops to force a distribution of stock that they will be accumulating. The key, whenever there is a significant rise/fall without a flurry of trades crossing the tape, you can bet the mm is behind the move. As for Friday, he might have been setting up the action for next week. In anticipation of the release of first quarter adds, he knows a lot of people are going to be watching this stock. He is doing his part of help that interest remain positive. In all probability he has a good deal of stock in inventory that he is going to unload during the next leg up. When that move is complete, there will be a retracement at which time he will replace his inventory. Being a mm is a money making machine without parallel, they make the market, control the market, and acting as a broker or dealer make money on spreads, and position trading.
Ken |
