From TradingView · · 1m 20s
Who's selling Rentokil into the strength?
A trader spots a floor in Rentokil Initial and reads the volume spike as institutions quietly stepping out.
In brief
A trader spots a floor in Rentokil Initial and reads the volume spike as institutions quietly stepping out. A jump in volume at a price floor can mean a big holder is selling into buying interest, not that the stock is turning. Originally reported by TradingView.
The fundamentals look bad
Rentokil Initial gives anyone hunting for negatives plenty to work with. The trader acknowledges it upfront rather than arguing the bear case away.
“Dive into the fundamentals and there's plenty of negativity to get stuck into.”
Price has found a floor
Whatever the fundamentals say, the chart shows the selling has stopped dragging price lower. That floor is the whole basis for the long idea.
“Either way, price looks like it's found a floor.”
Target is 385p
The trade is a move back up to 385p, roughly 10.5% above where the stock sits now. One level, one number, no hedging.
“Price target: 385p Potential reward: 10.5%”
Volume is doing the talking
Recent trading volume has picked up sharply at this level. To a volume reader, that means real interest rather than drift.
“The increased volume traded recently suggests strong interest at the current level.”
The market fools you
Heavy buying interest looks bullish, but the obvious reading is usually the wrong one. That instinct drives the rest of the argument.
“The market rarely reacts the way you'd expect.”
Institutions sell into strength
A big holder dumping into weakness moves price against itself. Selling into buyers hides the exit, so the volume spike may be a seller, not a buyer.
“If you were an institution looking to reduce your position, wouldn't you offload into strength?”
The short version
A jump in volume at a price floor can mean a big holder is selling into buying interest, not that the stock is turning.
