Things start to get interesting

A foreign fund will be on our shore soon. Armed with approx. USD100 million, they intend to take up position in our equity market. We have the privilege to know that they now have a list of 15 stocks to choose and they will select only 5 - 8 stocks that fulfil their criteria. One notable criteria is they are not in favour of any blue chip stock or KLCI index linked counter. We have the benefit to know of the list but stop short of knowing which of the 5 - 8 stocks they intend to take up positions. They have very good reason not to reveal to anyone lest the market will drive up the stock price before they take up their positions. As of today, they have not move in but very very soon.

We have been busy monitoring those stocks on the list for the past couple of days and apparently some market players has picked up the news which explained why some of those stocks had shown odd price movement behaviour lately. Perhaps they had taken their position ahead of possible action by the said fund.

What I meant by odd price movement behaviour? How many of us will really pay attention to the final minutes of the trading session. 4.45pm - 4.50pm is the Pre-closing period and between 4.50pm - 5.00pm is the Trading-at-Last period. Most of the time we tend to overlook the important of these 2 periods before the closing bell. Actually many things could have happened unexpectedly during this time. Of course, there is always a reason and the retail investor will not able to know.  The price matching with occur at exact 4.50pm and once matched, TCP price will be determined for the last 10 minutes of trading until closing bell.

The following charts which shown the odd price movement behaviour on 13.2.2014. I leave it to you to ponder.

Few seconds before end of Pre-closing session where price matching will happen at 4.50pm.

Moment after 4.50pm

 

 

Near closing bell

 Trading closed

If you happened to come across such price behaviour, you should savvy enough to able to take appropriate action to your advantage. By the way, Presbhd is one of the stock on the list that I mentioned earlier.

Good luck.

Its price closed at RM3.11 on 14.2.2014.