We have noticed that quite often when the number of shares bought exceeds the number of shares sold the share price sometimes goes down ( and in some cases by quite an amount eg African Eagle AFE today..11/2) Yet some share prices increase when there are more sells than buys eg African Diamond AFD, African Gold AFG today etc. Can someone please explain why this is, as the number or buys and sells has in the past been key to our trading strategy. Is the information on Ample or Money AM concerning trades not accurate or are we missing something. Any answers / explanations would be really welcome.

Thanks Safiende it would be good to post this on the other AFE thread which is looked at more. All good news now I hope and also a tip today from Tom Winnifreth on tips.com.

brain2brain - 11 Feb'04 - 17:44
We have noticed that quite often when the number of shares bought exceeds the number of shares sold the share price sometimes goes down ( and in some cases by quite an amount eg African Eagle AFE today..11/2)

After the market makers have sold load of shares, eg after bumping up the price to make a nice fat profit on a company releasing good news, they will want to buy the shares back at a lower price. A large drop might catch out anybody with a stop loss and force them to sell. So it is good business sense for a market maker to drop a price after a spate of buying, particularly if there are stop-losses in place, or if people have bought on credit (T20 etc) or have other terms which might require them to sell later - spread bet?

Yet some share prices increase when there are more sells than buys eg African Diamond AFD, African Gold AFG today etc.

If the market makers have bought a large supply of shares it is in their interest to sell these at a profit. If Joe Public has for some reason been selling, it stands to reason that Joe Public becomes a net buyer when the net selling period ends. To maximize profits, the market maker ought to increase the price when selling drys up. During a selling period they should have lowered the price so that they shell out as little cash as possible for the shares. So even without inflating the price when people become buyers, the price might tend to return to 'normal'.

Can someone please explain why this is, as the number or buys and sells has in the past been key to our trading strategy. Is the information on Ample or Money AM concerning trades not accurate or are we missing something. Any answers / explanations would be really welcome.

Information on buys and sells is not provided, only time, price and quantity. The buys and sells we see are somebody's best guesses, usually the result of a computer program. When in doubt, it is better to look at the trades and decide for yourself. The information is often incorrect.

Whether a price is low or high should really depend on whether people are net buyers (charge them whatever you can get away with) or sellers (give them as little as they are prepared to take). Today's sentiment can be the same or different to yesterdays. So yesterday's sentiment can't really be a guide to today's price trend.

A final note is that market makers can own (or have access to) a huge pile of stock, maybe from a share pracing, and they can have warrants too, or an institutional buyer or seller in the background. So they might be able to sustain long periods of seemingly inbalanced trading.

Minews Story
Date: November 25, 2004

African Eagle Has An Iron Oxide Copper Gold Deposit By The Tail At Eagle Eye And A Possible Gold Mine At Miyabi.

What with an extended rainy season, lack of drills and a queue a mile long at the assay lab it is not surprising that news from AIM listed African Eagle has been a bit sparse over the last few months. The share price suffered as impatient investors tried to make a fortune elsewhere, but they will probably now be wishing that they had stayed put as the company has released very encouraging news from both its Miyabi gold project in Tanzania and the Eagle Eye copper and gold project in Zambia. In the event the company wrong footed one or two commentators as the biggest expectations had been built up for Eagle Eye, but it is Miyabi which now shows every indication of becoming a mine. As a result African Eagle has swiftly made the flight from pure explorer to developer and the share price has been trying to catch up.

3 RNS announcements and the share price up from 14p to 28.75p in 7 trading days.