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Thursday, February 28, 2013

Suzlon Energy Maha Crash!!

In these days of Super Stock Crashes, Suzlon Energy is not the one to be outdone. It outclassed itself and posted a Maha-Crash of 34% in a single day. For a large cap company, probably it is one of the largest crashes ever, or definitely one of the top 10 on the podium. Congratulations Suzlon on your great performance!

Now what to do with Suzlon Energy? Lets look at the charts and figure out:

Please look at the Intra-day chart for Suzlon (cash) and it shows a reasonable steady start of the day with a few green candles laced by red ones. The candle at 11:30 is the one where bears take over with good volume. This is the candle where people with inside information sold heavily.

Next few candles are for the swing and intra traders who shorted based on the weak trend for Suzlon charts. Candle for 2:45 is where the news start getting out that Promoters have sold their 6% stake worth Rs 240 crores in open market. Now this is a huge sell off by promoters and signals weak promoter confidence to the market participants.

Next 3 huge red candles show the crazy shorting and dumping fever in the market as people threw Suzlon away at whatever price available. At 3:15pm the sellers ran out of their total stock.

Last candle shows a interesting phenomena! Its a beautiful green candle which tells two stories:
1. Short sellers closed their position in last 15 minute and took profit off the table.
2. People with Insider information bought Suzlon at dirt cheap prices.

In last two 15 min candles, Price went from lows of 13.4 Rs to high of Rs 17. Pls see the volume for last green candle is as high as second last crazy red candle. Meaning, insiders bought whatever public threw away at very cheap price!!

Now, lets look at daily chart for where the price is wrt the last 12-18 months. Price today has closed above the lowest low of last 12 months. Meaning there is support and buyers at Rs 13-14-15 range. Insiders, who know the value of Suzlon at these crazy low prices.

Remember, this is the same stock that used to trade at Rs 450 in 2007 heydays! Times have changed, but dead elephants also have some value. Promoters would infuse this cash back in the company and would increase their stake substantially. But who lost heavily today? Its the retail investors who got ripped off in this Maha-crash saga. No wonder, Indians have stopped investing in Stock Markets completely.

1 comment:

  1. Crap indian markets, retail must stay away foreever.


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