Price/Vol Analysis - Cosco Corp II

Looks like investors/traders love COSCO very much. The daily visit surged a lot for the particular day when I put Price/Vol analysis in my blog.

Today COSCO surge pass $2.94 (waterline) where 17,000 lots were dumped down previous day. I have roughly calculated the volume on the day one after the dumping. Average price $2.87 with 25,748 lots (14,276 lots buy up, 9,904 lots sell down, ignoring director buying/selling), volume distribution as below:

The volume suggests that there might be slight accumulation or short covering but overall is not really convincing as the price move above the waterline in the very next day.

Two possibilities could happen:

1. Accumulation done and push to next level (above $2.94). Accumulate again to surge for next level ($3.18).
2. Partial short covering done, push to next level to distribute again thus current price more than $2.94.

By looking at the profit for shorting 17,000 lots and covering at average $2.87 is about 1-1.2million and the accumulation takes place only in one day which is quite short, I am afraid it might be the latter scenario.

The fear is not good enough, the profit is not good enough. These reasons might force the invisible hand to do another round of killing. However, since they are a lot of BBs looking at this counter, it is not easy to do so unless the general market is moving south.

The worst situation now is the price move sideway along $2.94 - $3.18 band for some time. It could be a sign of distributing at higher low.

Why distribute at higher low? It is because distributing at low is hard, you need to push the price slightly above the low to create 'hope' for retailers. Price slightly above the low is called higher low.

To enter safe into COSCO, you need the gap between $3.18 - $3.36 to be fully filled.

Looking towards positive side, the south moving is a positive sign. First of all, do you know COSCO has previous weekly gap from $2.98 to $3.28? Filling the weekly gap is to strengthen to upward force 'later' and myth also tells us that weekly gap will be filled sooner or later.

If sell down is heavy, the hand who catches it is also strong. There are a lot of hands in the market, one hand decided to quit. So we let him quit the game. Just be careful of overall market turn south.

Personally, I am not vest or not yet vest.