With all things algos these days stocks rarely repeat for size at the same price.  Instead of 41.70 just repeating on the offer.  There is some at 70c, some at 71c, some at 73c, some at 77c as the sell algo lifts to see if the buyer will pay higher.  So when find a seller selling at the same price, repeating at the same price on the offer, this is rare.  And it may indicate a big seller to follow.

Today we saw this in RIMM.  41.80 sold too much on the offer at the same price.  Then a seller(s) stepped down and sold stubbornly at 70c.  There was no algo lifting to selling higher.  There was just 70c on the offer sale.  70c on the offer sale.  70c on the offer sale.  All of this streaming on our prints.

Since we spotted this aggressive seller on the tape RIMM has done nothing but trade lower.  Much lower.  And it shows no signs of breaking its intraday downtrend yet.

We have noticed this aggressive seller foreshadowing big moves to follow lately.  This signal from the tape is not something to be ignored in this trading environment.

When we spot an Unusual Hold on the Offer in a weak stock we get aggressive.  We want to be fully loaded with stops above the held offer.   Think how big can you get at this moment while being responsible.  This is not a high percentage trade but when it works the reward can be points.  So overall this can be an excellent risk/reward trade.

Mike Bellafiore

Author, One Good Trade