While browsing through charts of various stocks, I came across a company (Manchester Inc., symbol MNCS) with a chart that’s unusual enough that I had to check around to reassure myself that my primary source for stock market prices wasn’t playing tricks on me.
It has a history of unusually steady increases with few signs of the randomness that I normally see in stock prices. If you had bought at the closing price any day this year and held for ten trading days, it would have closed higher than your purchase price (your average gain would have been over 3 percent), and it was almost as predictable the prior year.
A paragraph in the middle of this Forbes story explains why its market value looks strange.
The only guess I have as to what might cause this is an unusual form of manipulation where the manipulators produce this phenomenon until traders who buy purely on price trends provide enough liquidity for the manipulators to cash out. But even that is pretty implausible – if that’s what’s happening, why wouldn’t they create a bit more day to day randomness to disguise it a bit? And how could they afford to risk as large an investment as I suspect that would take on an approach which seems different enough from anything tried before that it ought to be hard to predict whether it will work?
One comment on “A Stock with a Strange Price History”
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This stock is the strangest thing I’ve ever seen. My friends and I call it “old faithful”. The only other chart I’ve seen that was even close to being as smooth and predictable as this one is the former IST (Ispat International, a steel company), which was merged into a mega company with a few other steel companies before I had much time to trade it.
Have you ever tried to manipulate the price of anything, perhaps on ebay or in a mmorpg game? The capitalization required to pull off something like this is unbelievable. I don’t dare mention the ticker symbol in public for fear of disrupting this gang of market makers’ fine work by attracting attention to it. I suspect that the price trend will end spectacularly, though whether it be buyout or scandal I don’t know. I want my risk capital safe and sound back on the sidelines before something happens either way.
I’ve devised a strategy for buying into smooth uptrending stocks like this one in such a way as to minimize potential loss of risk capital. Here’s a link to my description of the strategy I used for my campaign in the stock you’re writing about:
http://fickletrader.blogspot.com/2006/08/breaking-off-piece-part-1.html
Enjoy.