Disliked{quote} Alright so...can anyone point out variables why we got such a drastic move today on CHEK. Understanding the variables is understanding how to tell of flagship play.Ignored
In CHECK there were few variables at play that brought the play to how it played out.
-asset with long term daily down trending chart, such asset will usually attract shorts very quickly if price starts to spike up. Price did spike strongly yesterday, which attracts aggressive short sellers
-Yesterday it was pointed out that single large buyer was strongly defending and absorbing at both downside and upper side of channel (order book, spreads , quick price jumps etc)
-Into the close price closed right at the supply, means shorts will be more shaky
-In asset that had previous short squeeze some shorts at some brokers will be forced to liquidate positions in 1 day or over night as broker protects itself from potential gap loses, this means chances are price might go up at pre market trading if some shorts are forced to cover
-Once the price starts to trade pre market above the supply all shorts can see that but most shorts cant do anything until the market opens, so what does that mean? Its a panic time and every short will be thinking the same thing: let me cover short on the first minute of market open to exit before other shorts to get as small loss as possible, as short covering adds to demand increase.
-So the timing factor here is crutial....having information (asset trades higher pre market) but not having ability to do anythign until the market actually opens is crutial factor that tilts the long trader to think, it might move very quick and strong upwards.
The whole thing here is a panic factor with many people having the same thought / approach right from the gates open. This pattern happens again and again and again....
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