Legendary activist investor Carl Icahn announced yesterday that he was taking an 8.5% position in miner Freeport-McMoRan (FCX). I can imagine that traders rushed to their fancy monitors to see what was going on only to be disappointed by the lack of technical insights.
Chartists basically use the two things from the market place that are generated by trading: price and volume. Price and volume are never seasonally adjusted or corrected, so technicians trust them more than earnings and other fundamental metrics.
Looking at the short-term chart of FCX, I fail to see any hint of Icahn's accumulation.
This chart shows the downtrend in FCX along with its on-balance-volume line (OBV) below the price of the stock. The OBV line goes down and down. The OBV uses simple math -- if the stock closes up on the day, the day's volume is added to a cumulative running total. If the stock closes lower on the day, the turnover is subtracted from the running total. The line in this chart declines, so bigger numbers are being subtracted on down days then added on up days.
What does this mean?
Carl's trading desk worked their buy orders slowly and only bought stock as it was offered to them. They were "scale down buyers." They bought stock from others looking to get out of FCX without bidding up the price of FCX and tipping their hand. Well done!