- Wealth PMS
Ranbaxy saw some weirdo trading today. Look at today’s bar.
The high of the day was 660! That’s ridiculous, obviously but why did it go that high? Let’s look at a 15 second chart.
It’s off the chart, but the price was on a very low volume – look at the much higher volume bars after it, and probably was just one share transacted (don’t have that much patience to investigate).
If a single share transacted could have been at this level, it could be a simple rigged transaction to “show” a price. Now if one could “show” such a price it would be very simple to do a bulk deal, no?
So everyone waiting for Ranbaxy to cross 700 might just see such a transaction, a single share traded at the open, above 700, and the bulk deal happens – and everyone else gets only much lower prices.
Be careful with Ranbaxy speculation. I know I said that the price ought to go up (more for fundamental reasons), but the last few days have seen dropping volumes with a rising share. And on such news this should not happen. The path of least resistance is now down – so any short term speculation on Ranbaxy’s price going up may be disastrous.
On a different note this is horrible for us system traders – as our systems depend on the data. One random off point like this can hose us – and that’s why we have to focus on removing such random data points from our systems (1 share traded etc.)