I’ll explain what happened with the help of screenshots.
Stock monitored was Gravita Industries.
The key here is that many investors view the book before making buying or selling decisions and some operators take advantage of that.
Gravita opened today at around 169 and quickly 171.
At around 10 AM I opened Gravita’s book and saw that there were about 8,00,000 buyers and 2,20,000 sellers.
15-20 minutes later the price dropped to 169. The number of buyers and sellers were 7,00,000 and 2,40,000 respectively.
Now Gravita is a fancied stock and any eager investor may have bought the stock around 170 levels after viewing the book.
In another 30-40 minutes or so (I do not recollect the time, but you can check the timestamp on my screenshots), the price dropped to 165-166 but the buyers still outnumbered sellers. Over time, the price kept dropping until the price was between 163-164. At these levels, the buyers and sellers were almost equal in number.
Please refer to the images and check the captions
The stock closed around 156.90.
Conclusion
If you invest in stocks by viewing the book, then keep the following in mind:
If buyers outnumber sellers and the price continues to drop — then it implies there is either a hidden seller or a big seller who has not registered a sell transaction. You should get out of such stocks that exhibit such price movements within an hour of getting into the trade. However,, this does not translate to a full blown bearish signal especially if you know that the stock is high quality. It represents operator selling.
Conversely, if sellers outnumber buyers and the price continues to rise — it implies there is either a hidden buyer or a big buyer who has not registered a buy transaction. This is an extremely bullish signal. If you come across such stocks, you should immediately buy them.
That’s it for now. Ciao.
Thanks a lot for sharing it so analytically. Please do continue with such disclosures and allow us to understand market more .
Sir same thing happened in nifty
I agree sir, they just keep the buy rate too low so it does not reflect in best five bid. Similarly they keep the selling price too high so that it does not reflect in best five offer.
Will preserve this post life long… excellent explanation .Thanks sir.
This article is a very consise lesson on how not to be fooled. Thanks for explaining in an easy manner with examples.
Excellent work Sunil. We really appreciate. Keep doing these good work. Also, appreciate your intention to share it.
Hi Sir,
Could you please throw some light on the doubt i have.
Since last 15 days i have been noticing the many midcaps stocls are going for UC where the volume traded are less than 200, sometimes less than 100 even.
How is this possible with just volume of 100 or 200, the UC or LC is hit?
Name the stocks, please.
Sir, just check script Euro ceramics, its purely operators driven but if you check bulk deals no record in BSE/NSE what will you say about such script?
Kindly share LINK for How Operators Trick Investors –PArt 1
Please browse through my blog.. the pagination is at the bottom