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Commentary

Ranbaxy Spikes to 660 at the Open

Ranbaxy saw some weirdo trading today. Look at today’s bar.

ranbaxy EOD

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.

ranbaxy 15 second

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.)

  • mahesh says:

    >Even today’s(17th June) ranbaxy chart shows a high of 585,whereas its hovering around 570 levels for quite some time.Clearly somebody is rigging the prices. SEBI should investigate this for all the scripts

  • Mahendra Naik says:

    >We all know who is rigging the price, so expectedly SEBI should also know. The question is whether they want to do something about it.

  • mahesh says:

    >Ranbaxy might go down to 450-480 levels if the Pfizer counterbid doesn’t happen soon and the open offer from Daiichi will happen only in August timeframe. Better to exit and buy it when the markets stabilize in July beginning? Any comments?

  • Mohan K.V says:

    >Fascinating! Especially your comment about such things affecting automated trading systems.