A typical operator driven company. Please avoid trading/investing in such companies. I had a look at the financial statements of this company (last updated on March 2009), and this may surprise you…
Market Cap : 1,666 Crs !!!
Total Net worth as reported on Balance Sheet : 2.39 Crs!
Total Assets/ Liabilities : 4.84 Crs
Total sales : 4.3 Crs
Reported PAT : 15 Lakhs
After all this, 1,666 Crs market cap ??
To give you a perspective, Garbriel India - they are the largest and the most popular manufactures of automobile shock absorbers, doing annual sales of over 1,200 Crs are valued at 780Crs Market Cap!!
So don’t waste time on such silly companies my friend!
Here are some additional possibilities (any or all might happen)
A group of people are tracking a particular stock and waiting to buy it at particular a price. E.g. Institutional investors - even though they follow fundamentals, they time their entries based on technicals - enter when price comes near strong support like 200 MA. When the price reaches their desired level all of them enter.
HFT Momentum algorithms detect this kind of activity which triggers massive trades.
Shorts are trapped and they rush to cover their positions. Commonly known as short squeeze. Also running the stops is a very common phenomenon.
With such a huge demand and not many sellers left, price moves upward at a rapid pace.
These kind of movement does happen in one stock or the other day in day out.
Quite simple karunakumari, just look into basic fundamentals, like I’ve discussed above. If 2+2 does not equal to 4 then you know there is something fishy. Companies like these are best avoided even if there is a perfectly aligned technical pattern.