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.)