This is advice for the retail investor how to avoid investing in shares that can be manipulated – not advice for the manipulator!
1. Avoid shares that are fundamentally unsound and trading at very low values – these shares are picked up by manipulators in large quantities very cheaply and then rumors about a big sale or turnaround are spread as the share price rises the manipulator unloads his/ her shares – a typical pump and dump
2. High profile company’s shares with relatively low free float can be manipulated easily
3. Small company shares can be manipulated – if relatively few shares are in issue
4. Illiquid shares with more sleeping shareholders can be manipulated
5. Shares with cyclical demand pattern can be easily influenced
6. Nature of the business that the company is involved in for e.g. gems, oil, strong government influence or risk of policy change – have been manipulated
7. Always be suspicious of shares that show sudden unexplained increase or decrease in price.
8. Avoid investing in companies where “known manipulators” are active