Following the stop trigger of my HCC short position yesterday, again, the market kicked me out again on another short counter that I have. That is DLB (Dolby Laboratories) that I picked on 30 July .
I spotted the DLB on 30 July after 29 July closed. The stock was trading near the 100d MA resistance and also just formed a recent high which offered a good risk/reward ratio to short.
I shorted and I also put a stop loss order in order to protect myself, but still, I am still fooled by the market big boy this time round? Let’s see what we can learn from here.
DLB opened 43.25 and then it dived hard down till 37.01 and finally closed at 39.24, forming a dark candle and a long shadow. It was a volatile day traded with such a huge range. My stop loss was at 42 which was a recent high formed on 25 July. Do you think it is normal that a counter can trade with such a huge range in a day?
My answer is NO. It is abnormal. My view is that it was done on purpose. It is a strategy that the market big boy is trying to eat up all the retail investor. Firstly, the big boy pushed the price up with 3% higher than 42 when the market opened, this move can trigger majority of the stop of the short seller. It can also seduce some buyer into the counter to make them believe a break up is in the formation.
Take a look at the day chart, who will ever know that the counter dived from a high of 43.25 to 38 in just the first hour of trading, wow, that’s a 10% loss. After which, it is trading near the range of 37-39.
This is an important lesson to realize that how the big boss can play us retail investor out from the market. They can make the money and we lose the money.
Although I am not happy that I made the 2nd loss again. On the other hand, that taught me lesson to see how the big boss in action, I heard about it but this is the first time to see it and experience it.
I still have one holding with me, that is NMX. I will continue to monitor DLB for the time being, the market action suggests that market big boys are in play and we can possibly make some money if we stick hard with them 
DISCLAIMER: This information is used for learning purposes only. It does not constitute an offer or solicitation to buy or sell. You should do your own analysis on top of my postings.
