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I own this stock, and I've never seen a chart history like this before. Pictured below:

enter image description here

I've never seen a stock chart with flat peaks like that. This stock has been fluctuating for the last month but ONLY by hundreths of a cent, never breaking exactly $2.61. Is there an equity rule, procedure, or event going on that I'm not aware of? Can a stock be forced to have a maximum price? I've seriously never seen a stock with only flat peaks.

For comparison, a normal looking stock chart below:

enter image description here

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    It could very simply be a sell order when the stock hits a certain price. Basically the owners are dumping as many shares when it hits x, the price retreats, and the some people buy in again. – Pete B. Mar 21 '18 at 16:45
  • @PeteB. I only snapshoted a 3 day period in March, but this stock has looked exactly like that every day for over a month. Those sharp rises and drops, with flat peaks. It seems unlikely that the activity you describe is causing this every day endlessly. – WakeDemons3 Mar 21 '18 at 16:47
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    Looks normal for a stock with pretty low volume. The "flat peaks" are periods of little to no activity. If someone's selling off lots of the stock at a certain price, that effectively sets a price ceiling til the seller's supply runs out. – cHao Mar 21 '18 at 17:01
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    I agree with @cHao - its just the result of very low volume. – Norm Mar 21 '18 at 17:09
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    Looking at an intraday chart of a $2 stock will often look exactly like the chart you posted. It's not the first time that this stock has stagnated for several days with no price change or for even more days in a several cent price range. This is much ado about nothing. – Bob Baerker Mar 21 '18 at 19:10
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The flat peaks just mean that either no trades were made, or at least no trades were made at any price more than a penny from than the "last" one, so the "price" did not change more than a penny. given the small bid/ask spread and relatively high order sizes on both sides, it would take a lot of activity to move the price outside of the bid/ask spread.

There's nothing systemic that enforces a max or min price - it's simply the current supply/demand spread

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These are just thinly traded securities. The flat spots are just areas of no price change. Price movements on these low volume low liquidity securities are pretty obvious because of the bid ask spread. You can see pretty obviously whether the last transaction was a buy or a sell because the price snaps to the bid or ask price then just stays there until the next transaction which may be days or weeks later (or longer).

Very Obvious Low Volume/Low Liquidity

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Less Obvious Low Volume/Liquidity

These ones are a little more liquid and have a lot more volume so the flat spots are a bit less noticeable, but they're there.

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As a general rule, unless you're very confident in what you're doing, you should probably stay away from these securities.

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    I like your answer but it should be noted that you had to use OTC penny stocks to illustrate it. Not very parallel to a Nasdaq/NYSE stock that trades at ~2.60 – WakeDemons3 Mar 21 '18 at 17:32
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    I'm illustrating the concept. This is how the chart gets this way, your example isn't different because of the exchange it's on; it's a low volume security, just like these. There are something like 6000 companies listed on either nasdaq or nyse, i'm sure there are more "parallel" examples you can go hunting for, but the concept doesn't change. – quid Mar 21 '18 at 17:36
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    Victor, it's not completely wrong. The chart looks that way because that's the range the stock traded in, just because the timing is different or one has more volume than the other doesn't change why the chart looks the way it does. It's not some mythical upper or lower price constraint as surmised in the question. I pulled charts from the quickest way I could think of, I'm sure there are plenty of nasdaq or nyse examples as well. The chart stays flat when ther are no trades – quid Mar 21 '18 at 23:48
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    1 million shares is extremely thin compared to Apple's 38mm share average daily volume... And remember, this is a person who began this having "never seen a chart like this in my life" and "Is there an equity rule, procedure, or event going on that I'm not aware of? Can a stock be forced to have a maximum price? I've seriously never seen a stock with only flat peaks." I'm all for encouraging people to learn and do, and I do think people should learn and trade their individual companies but this question was borne out of a serious lack of experience and/or understanding of the market. – quid Mar 21 '18 at 23:59
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    Victor, this is an agree to disagree situation. I didn't say anything about the UMC's liquidity versus anything else, I was talking about the relative obviousness of the charts. I said these charts are "very obvious" low volume, then the next three charts are "less obvious." I was commenting on the obviousness in the chart. And it should also be pointed out that in the examples I'm using a 6 month timeline, not 5 mins. – quid Mar 22 '18 at 0:14
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You are looking at 5 minute line chart of two days trading, so all you are capturing is the last price traded for every 5 minute interval over two day.

Below is the same stock (UMC), over a 6 month period with a daily candle chart. It captures the opening, high, low and closing price for each day.

UMC 6 Months Candle Chart

As you can see the price does move just like most stocks, and the average daily volume is over 1 million per day, so it's not really an illiquid stock. It just seems like over the last couple of weeks it has been going through a tight trading range, maybe waiting for some news to come out.

You can't look at a couple of days trading on a line chart and find out much about what a stock is doing. Even if you look at a 5 minute chart to enter your trades, you should be looking at much more details to determine what is going on with the stock.

  • Thank you for the answer but the judgment call about how useful a 2 day window is, is irrelevant. The question was specific: "Take this two day window of UMC, compare it to the same two day window of GE, and explain why it looks that way". And several people have answered that. The end. – WakeDemons3 Mar 22 '18 at 20:52
  • The answer is not low volume because even on the 2 day chart there is decent volume. The answer is trading in a tight trading range. Just because a few people agree on an incorrect assumption does not make it correct. – Victor Mar 22 '18 at 21:13
  • So if you want to live in ignorance, that is up to you, good luck in making future decisions on your share trading 💹! LOL – Victor Mar 22 '18 at 21:18

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