A dark pool sell order for $19 million hit in after-hours trading on April 17, 2020, in AKAM stock.
To be real, unlike some popular dark pool trading services, we cannot see if the dark pool trade was a buy or sell; however, because readers of GuerillaStockTrading have expressed their desire to know precisely that, I give it my best educated guess without any bias whatsoever. I think the dark pool trade looks like a sell-order and here is why.
AKAM stock selling began in pre-market trading on April 17, 2020. As regular market trading began, a large $7.7 million sell order hit the tape which continued the selling. A smaller $5.2 million sell order hit at 10:11 AM.
These large orders in regular hours front-ran the dark pool order that printed immediately after market close.
The Market Exists To Screw The Greatest Number of Traders At Any Given Time
These well funded traders sold into the Nomura analyst price hike and mention on April 15, 2020.
On April 15, 2020, Nomura Instinet analyst Gregory McNiff raised the firm’s price target on Akamai to $115 from $100 and kept a Neutral rating on the shares. The analyst expects Akamai to benefit from the surge in streaming traffic as well as work-from- home measures, which he believes should drive increased interest in enterprise security. Some portion of current elevated traffic levels will prove sustainable, McNiff tells investors in a research note. The analyst, who notes Akamai shares have held up very well since mid-February, lifted the company’s estimates.
How better to screw the maximum number of traders than to sell into an analyst noting that a stock has held up well since mid-February when the coronavirus pandemic sell-off began. Notice the analyst covered his ass by keeping a neutral rating on the stock. Nomura gave market makers the liquidity they needed to execute some fairly large sell orders on April 17, 2020.
Finally, notice where this dark pool trade occurred on the daily chart of AKAM stock.
The blue shaded area is the mean average band that AKAM stock spends 90% of its time trading in or touching. The price has overshot and now a mean reversion trade will likely kick in. Mean reversion trading is a more advanced strategy used by institutional traders, the same traders that trade over dark pools. When you consider the Nomura analyst comment, “Akamai shares have held up very well since mid-February,” it sounds like a “come and feast boys” dog-whistle to institutional traders that a stock has rallied too far ahead of its mean and so it’s a prime candidate for a mean reversion trade.
Disclosure: We do not any position in AKAM stock.