FORBES: The five steps of manipulation
Manipulator(s) prefer a neglected stock, often lower-priced with lackluster trading volume and an uninteresting chart pattern. Then, they act.
Note: With today’s rapid communications and trading capabilities, the following steps can occur very quickly, as the charts show.
1 They quietly accumulate a position to avoid notice
2 When the time is right, they step up their buying, causing a strong price rise to trigger interest and entice new buyers, thereby pushing the stock higher (this is the “pump” phase)
3 The now-obvious action produces website "analyses," helping spread the word (manipulators can support this activity)
4 Social media chat boards excitedly pick up the action and spread the word further (manipulators can support this action)
5 If all goes according to plan, the manipulator(s) sell into a strong buying upsurge accompanied by optimistic articles and conversations (this is the “dump” phase)
With the manipulator(s) selling and departing, the stock sinks. The remaining shareholders now are conflicted about perhaps missing the top but not wanting to miss another dramatic run-up. Then, as the stock sags further, reality sets in and the hangers-on sell out.
Manipulator(s) prefer a neglected stock, often lower-priced with lackluster trading volume and an uninteresting chart pattern. Then, they act.
Note: With today’s rapid communications and trading capabilities, the following steps can occur very quickly, as the charts show.
1 They quietly accumulate a position to avoid notice
2 When the time is right, they step up their buying, causing a strong price rise to trigger interest and entice new buyers, thereby pushing the stock higher (this is the “pump” phase)
3 The now-obvious action produces website "analyses," helping spread the word (manipulators can support this activity)
4 Social media chat boards excitedly pick up the action and spread the word further (manipulators can support this action)
5 If all goes according to plan, the manipulator(s) sell into a strong buying upsurge accompanied by optimistic articles and conversations (this is the “dump” phase)
With the manipulator(s) selling and departing, the stock sinks. The remaining shareholders now are conflicted about perhaps missing the top but not wanting to miss another dramatic run-up. Then, as the stock sags further, reality sets in and the hangers-on sell out.