The Art of Rolling Over

Posted by Kris | Tuesday, February 26, 2008 | | 0 comments »

Beware if you see these following pattern appeared on the charts. Don't think, just sell and run!!

The blue rectangle highlights the point of interest. Notice that the price did not move for a long time even though the volume is very high every single day before the huge plunge. This is a ominous sign that the syndicate is rolling over their stake by buying and selling at both the buyer & seller side. They are waiting to catch innocent retailers attracted by the active volume of the stock.

Because of the T+3 payment rule, they don't even need to pay a single cent for the huge volume that they bought. To do this, they are heavily leveraged to the hilt by using a margin account. The brokerage fees incurred is considered chicken feed for them compared to the money that they made trapping the retailers to buy high sell low.

The candlestick patterns shows the infamous ASIAEP and recently limit-down HDISPLY.

But seriously, i think this type of manipulation is very common in our beloved KLCI. I think it will be very hard to find this kind of trickery in huge & liquid market like the Dow Jones.I may be wrong though as I am not that familiar with the US markets. I will post it up in the future if i can find the same pattern on US stocks.