I have recently been having a look at a list of companies that have been sold off over the end of the financial year.
It is interesting to look at different companies that may have missed expectations or had delays in their business for whatever reason. It is not always a case of a bad underlying business but perhaps mounting pressure of losses that influences the investors psychology or investors/traders selling based on different stop loss levels to try and protect their capital.
You can see the same patterns repeat on a lot of companies where the interest is peaked and then if delays occur unfortunately as share price declines some holders are left holding potential large losses.
They may choose to sell all or part of their holdings and realise a capital loss (Be clear this post is not tax or accounting advice just general observation)
The investor may have had other capital gains in other companies and the realisation of losses in the under performing company may reduce the investors potential capital gains and therefore tax payable.
What I have spent some time doing is looking at historical data of how companies performed in July & August following the end of the last financial year and the beginning of the new financial year.
You may wish to search for these by filtering RSI (Relative Strength Index) or by looking at companies trading at or near 52 week lows during May and June.
Lets see if Mr Bounce comes out to play this year