good news for company = short sell

[jonboy123]

hi, just an observation (by a newbie, sorry if im talking nonsense).
AUTONOMY
(AU.)

this company had good news reported on early thursday.
So people would assume rising share price, so BUY.
Wed closed at £13.35
thu opened at £13.58 (high compared to previous days close)

and during thu the share price dropped gradually hitting around £13.23

the company is overall trending upwards.

maybe the shortsellers pushed the high opening price down during the day?

So good company news which pushes the share price UP initially, was a good short selling opportunity, during this day.....

so the bearish short selling was more powerful than the bullish buying on this day?

am i thinking valid thoughts?

 

[jonboy123]

here you can see wednesdays close....and thursday chart....

 

[jonboy123]

good news reported wed and early (7.30am) thu morning


tues close £13.26
wed close £13.35
thu close £13.57

only 2p increse over wed and thu.
but massive diff in opening and closing on thu...... short sell opportunity as price dropped during the day.

(7th april... bigger price decline....ahhh....candlesticks = dark bars = short sell opportunites....)

 

[KillPhil08]

Gap close.

Buy the rumour sell the news.

If is was unexpected profits it might rise, otherwise it's as expected so will go back to equilibrium.

This question reminds me of "why did the share price rise when they had job cuts?".

 

[jonboy123]

Gap close.

Buy the rumour sell the news.

If is was unexpected profits it might rise, otherwise it's as expected so will go back to equilibrium.

This question reminds me of "why did the share price rise when they had job cuts?".

gap close?
i dont get what you say.
sell the news? you mean good news = short sell...?
are my points all valid and informed?

 

[KillPhil08]

search bar top right.

 

[jonboy123]

cmon people...any more thoughts?

 

[Bolimomo]

cmon people...any more thoughts?

Price drop after company releases good news is typical. Only sheeps buy into good news releases. You see: people who "know" about the pending good news have already told their "friends", who in turn told more "friends". A few days before the good news release, those in the knows are already in-position. Traders follow the chart movements. Some good traders probably have already picked up on "something is up". When "good" news finally hits the wire, it serves only one purpose: to attract the unsuspecting masses, the general public, the newbies. They are the ones who walk in to the slaughter house to provide liquidity to those who were already "in position" for a quick profit.

 

[N Rothschild]

who says it has to be short selling? maybe stock holders were unimpresed by earnings etc and deicded to dump the stock

 

[jonboy123]

Price drop after company releases good news is typical. Only sheeps buy into good news releases. You see: people who "know" about the pending good news have already told their "friends", who in turn told more "friends". A few days before the good news release, those in the knows are already in-position. Traders follow the chart movements. Some good traders probably have already picked up on "something is up". When "good" news finally hits the wire, it serves only one purpose: to attract the unsuspecting masses, the general public, the newbies. They are the ones who walk in to the slaughter house to provide liquidity to those who were already "in position" for a quick profit.

lol
man that is awsome!
suppose thats ONE possible explanation....
so youre saying, follow and analyse charts, rather than pay too much attention to news?
so when newbies jump in after the "good news"...as the price jumps, thats when the professionalls SELL.....?

so reading some good breaking news about a company at 7.30am, does not mean the share price will rise majorily during the trading day/week....ive seen this before....

man its so complex, theres proably hundreds of diff situations and reasons for buying and selling.......suppose the one reason/party/group who dominate the market, those groups actions affect the share price the most, after the news hits.

this is really interesting stuff.

 

[Bolimomo]

......
this is really interesting stuff.

Really? Sounds like you may be new to trading.

The old saying: "buy on rumor, sell on news."

Don't trade the news. Trade the anticipation leading to the news. Once the news is out, usually game over.

 

[jonboy123]

Really? Sounds like you may be new to trading.

The old saying: "buy on rumor, sell on news."

Don't trade the news. Trade the anticipation leading to the news. Once the news is out, usually game over.

of course im new to trading!
but rumor could just be that...a bull**** rumor.

Ive read also, that its best to trade by chart anaysis.

Yeah im seeing alot of conflicting market reaction to good and bad news alike...its like the market it full of intelligent and naive/amateur traders alike...with the sophisticated ones outsmarting the lesser experienced ones.... like theres too many people with diff concerns/hopes/strategies...

 

[Bolimomo]

like theres too many people with diff concerns/hopes/strategies...

The stock markets are chaotic in nature. What you see, the price movements, are the sum of millions of individual minds on what they DID in the market. Not what they think about the market. Anybody can tell you that they think this, they think that, they will do this, they will do that. Like... someone may tell you I will buy GS today at 120 because I think it's cheap. But in reality they may place orders to sell after they talk up the market. It happens all the time. Price charts show WHAT THEY DID. Not what they tell you they think.

Watch some documentary videos on animals in the wild. Herd animals, like zebras, or school of fish. Usually they feed leisurely and all move in random directions. But when there is an external event (usually some predators appear - lions, wolves, sharks...), the herd/school is shocked. Each individual animal first start to run/swim in all random directions as how they interpret the event. But sooner or later, you will see a pattern emerge - that they more or less all run in the same direction (so individuals won't get stampeded over). And some lead zebras may run here, then there, and the rest of the herd follows them. That is sort of how the price runs work in the stock markets. Once a "trend" is in place, you know the direction of the herd and you don't want to run against them for your safety. But sooner or later, and it would seem almost randomly, the herd will change or reverse directions.

The key to us trader is to observe and detect when a "run" is taking place. And profit from it. And always be on the look out for the possibilities of reversals. When a run is over, then all herd animals return to their random walking pattern to feed. Until the next round.

 

[jonboy123]

Good earnings report, share price goes up during the day.
Wait a day or two while getting ready to short sell as it has to retrace.

Or good earnings report, share price shoots up, and then you short sell.

Sell on good news.

Buying rumour is risky, as it is just that....a rumour.... if you buy, and the report is bad, then you are screwed.

Any commments? cheers.

Or if bad news, wait for the drop and then look for buying opportunity.

Or should we be in position BEFORE the news comes out?
Im thinking its safer to trade the aftermath of the news.