SmartInsiderTrades Patterns

At SmartInsiderTrades, we specialize in identifying and tracking insider trading patterns, offering you valuable insights into market movements.

One fundamental term investors should consider is the 'Insider Pattern Window (IPW)'.

All patterns listed above are variations of the IPW, representing distinct sequences of insider activity and stock price movements.

Here's how it works:

1. Buy-the-Dip

This is one of the most well-known and powerful patterns that long-term investors can leverage.

The "Buy-the-Dip" pattern occurs when insiders purchase shares after a stock's price has declined. This behavior can signal confidence from those with the most knowledge about the company, often indicating that the stock is undervalued and may rebound.

2. Steady Accumulation (Liquidation)

The "Steady Accumulation (Liquidation)" pattern occurs when a stock's price remains stable within a 5-10% range, and 80% or more of all insider transactions over the last 1, 3, or 6 months are purchases (or sales).

This pattern can indicate that insiders, with their in-depth knowledge of the company, are gradually building (liquidating) their positions, which might suggest underlying value in the stock. Conversely, if most transactions are sales, it may signal caution.

3. Steady Climb

The "Steady Climb" pattern appears when a stock gradually increases over several months, without extreme volatility, accompanied by consistent insider purchases. This pattern can signal cautious optimism from insiders, as they see potential for steady growth rather than sudden gains. When insiders continue to buy during a slow uptrend, it suggests a belief in the company's fundamentals, indicating it might be a stable long-term investment rather than a quick profit opportunity.

NB: Patterns often coexist with anomalies, which are the exceptions that defy typical trends. To navigate these, we've developed a range of mechanisms to detect anomalies within insider transactions.

At SIT, we continuously monitor insider transactions to identify such patterns, allowing you to capitalize on these opportunities. We recommend checking our blog regularly, where we frequently discuss this pattern in detail, especially when large insider transactions are involved.