Kepcorp after the ex-date of CA plunged $1.44 on the following day. This plunge marked the first day of a heavy selling and subsequent selling to follow. The gap observed on the chart marked big sellers intention. Should kepcorp be bullish, the gap should be filled with strong buying activity. After the plunged, the next three days were followed by profit taking and more distribution to come. Big sellers cannot allow continuous selling or they would lose money. Imagine if they were shorting at $13 and allow the market to tank down further without allowing it to go up first, they would not have sufficient funds to buy it at wholesale prices should they not take profits by covering some shorts. Therefore, based on this theory, there must be short covering and profit taking to distribute more shares to bring the stock down further.
The first distribution started on April 25th and the first selling wave started on April 26th. Today marks the start of a secondary selling wave. I expect lower prices to come for Kepcorp as I believe Kepcorp has completed it's course of a major rally since the accumulation phase last year. We should now look to sell on strength for Kepcorp.
Ronald K
