Market Behavior

I am a new but active trader, both with day trades and swing trades daily. In developing my trading skills, I have noticed a recurring pattern and am interested in what the behavior is behind it.

This week, I had a good trade with Nabors Industries (NBR.) I went in , short, Thursday afternoon when it was testing resistance at the $19.15 level. There was tremendous buying pressure throughout the last part of Thursday, with a clear sell-off late in the day. I held off taking profits, given the sell-off pressure, to take my exit Friday morning. The wait was well worth it, with the stock falling in early trading to below $18.00. I took my profit and did not look back.

My question for the group is this – I have noticed this type of price pattern with some regularity – very strong buying one day, with very strong selling the next. What is the basis of this behavior?

As a novice, I am assuming, a large fund or arbitrage has approval to buy a lot of stock in a particular range and does so on a particular day. Within this buying there are a lot of shorts riding the upward pressure. Then the next day the shorts are taking their profits – as I did. However, the sell-off the following day is at a much larger volume than I would expect. Is there something else going on in this pattern? I have made several successful trades following this pattern, but I would feel more comfortable if I understood the reasons for such price swings over two days – often without any news releases tied to the swings. Any suggestions are appreciated.

David L