Hi, I'm new here and was wondering if anyone could help me with understanding something I observed yesterday in a chart of SONS. During the last few minutes of trading the price dropped significantly with a surge in volume relative to the whole day. Then in the after market and today the price popped back up to the price before the drop. Is this because of the market makers playing some tricks to drop the price on a huge sell order so they can get in and later sell those shares when the price reaches and equilibrium again? Any help would be appreciated. Thanks!
I see that a lot during the day, a sharp Vee in price, resulting in a sell-off and recovery back to the previous price area. Usually it's the result of critical support being breached and stops getting hit, then the buyers come in and buy hoping for a rebound or buying at support. It's a daytrading play I've used sometimes and can be profitable if you're careful.
SONS looks very suspect. It dropped huge just before the close. I don't really know why but believe it did so because someone with big pockets wanted it to. This sort of thing is rather common. I've seen several instances. Basically the SEC ignores it (as long as it is from a large Wall Street firm). God help any 16 year old who does the same thing and extracts a couple thousand from the market's dumb participants.
For a recent example, look at CIT's close today. As you know, this is a recent IPO. It was pushed through at a lowered price ($23 from $27) because TYC was desperate for the cash. The syndicate is now doing everything they can to support it in the after market. They won't support it forever though.
The syndicate is only allowed to try and keep the price of the stock up for 30 days. This gives them the ability to try not to look bad if one of their offerings was to hit the market and crash in a couple of days. I would expect "CIT" will probably fall after the 30 day point.
anchor, I agree. Another one to watch in a similar situation is Medco It has been postponed for the upmteenth times. http://www.thestreet.com/stocks/biotech/10030821.html