The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
We will start to move north soon. £10 is my target over the years.
After trading between 20p and 30p for much of 2021, it now looks as if the Eurasia Mining (LSE: EUA) share price is on the verge of breaking out. A surge in buying this week has pushed the stock above 29p. A further jump in buying could send the shares above 30p.
What can be said categorically is that this pattern of auction bidding does seem suspicious and is consistent with the hypothesis, suggested by the previous weekend's intense trolling activity, that the stock is currently being shorted.
The answer, as you may have suspected, is to provide a false signal to help drive the share price down. It would appear trivially easily to arrange for very low UT prices on a small block of shares simply by selling back to yourself or a connected party. This of course would be considered market abuse, and would be illegal. But this does not mean that it can not happen - let's inspect the data to see if there is any evidence that it may be happening.
What these auction logs also show is how there are a number of new arrivals entering sales and undercutting the Market Makers, who run the trading in between auction periods. This raises the question of Why would someone go to all the trouble to use Direct Market Access to sell shares at prices lower than they could get from a Market Maker at pretty much any other point in the day ?
These volumes are not so high that a Market Maker would not touch them, and we know from historical inspection that the price that a Market Maker advertises to Buy shares from PI's at is almost always significantly lower than the actual price they will give you for the shares. Offering to sell at 24p when the Market Makers are advertising 24p therefore makes no financial sense, as I'm sure would be well known to 'sophisticated' investors with Direct Market Access.
Whilst perusing the Level 2 control panel I was recently struck by the surprising number of Direct Market Access (DMA) sells that would appear during the daily auctions that happen before the markets open (7:50-8:00am) at 9 am, 11am, 2pm and at the end of trading at (4:30-4:35pm.)
Those without access to a Level 2 interface may wonder what this is all about - so a little explanation is in order before I get onto the subject of how this system appears to be being used to manipulate the Share Price down, which I conclude is currently in support of a wider shorting or trading exercise.