lowtrade

[lowtrade]

A little more thought on the subject, more then the individual happening. Unreasonable price gaps!

I've noticed when your involved with a company which has a large institutional position, over say 70%. You'll find large news driven price gaps.

Why can only be guessed at. But the reason is (my guess) high freq trading algorithms used by these firms. This causes computer pile on dumping, large snowballing sell orders.

That guess is because many times the company involved has good fundamentals and such a large gap just shows zero human logic. I just got involved in RUBI which had the same thing happen.
http://stockcharts.com/h-sc/ui?s=RUBI&p=D&yr=0&mn=3&dy=0&id=p96275194756

Look at the volume yesterday at CCE. Bang some computer put up a open sell order way down @ $37 and the computers went nuts.
http://stockcharts.com/h-sc/ui?s=CCE&p=D&yr=0&mn=3&dy=0&id=p49898302447
You can't have 30% of the OS adding 1 day and 10% of the OS selling down 24% without computer error. IMO

Actually when you find these huge gap downs, if fundamentals warrant, are good trade opportunities. Because the reason institutional entered in the first place still exists. So re-entry can be expected.