If you sell now you’ve been caught by a classic seesaw.
During the morning one of the big institutional traders is buying MBI and selling short ABK. Now during the after noon they will sell MBI hard and buy ABK. You can see this in the tape and the trades.
The hope is that the smaller players won’t catch the tail of the tape and get pushed out of there long positions by the constant movement in the stock price.
Every single time you sell your shares of ABK it is money in the bank for them.
If you remain calm, and sit tight there burden increases ten fold. Where do you buy shares when nobody is selling them?
Keep in mind that the ABK crisis has been going on for months.and months. Are there really any large institutional investors in ABK who aren’t aware of the problems in the stock? No. Everyone who owns the stock understands in detail the downside risks. Hence the only pricing action in the stock right now is short movement.
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