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Should You Fall for Rumours in Stock Market?

Today we are going to dispel the notion that working on rumours can be disastrous for your financial health and in this context we take a latest case of Surana Solar Ltd which gave a breakout due to a conman acting in the name of the Badshah of the market i.e. Rakesh Jhunjhunwala. It needs to be seen whether the namesake is a real one or a conman who has tried to create this frenzy in the market. However the role of SEBI also needs to be seen that whether it is trying to save its some operators as the annulment of trade story can not be an every day affair as it is a free economy.

The story has been scripted like a movie where an operator bought a chunk of shares of Surana Solar Ltd, a little micro-cap, in the name of “Rakesh Jhunjhunwala”, the Badshah of Dalal Street. As soon as the news was made public, there was frenzy amongst the punters to grab the stock.

This sent the stock price surging to an all-time high of Rs. 63. At this stage, the operator dumped his holding of the stock, leading to abnormally high volumes on the exchanges. Later, when news leaked that the “Rakesh Jhunjhunwala” who had bought the stock in the first place is not the Badshah of Dalal Street but a namesake, the stock price plunged to a low of Rs. 32.

So the whole moral of the story is that one should not get into the frenzy into buying a particular stock even if it has been bought by the God of the market as his trading style and time period of holding may be different than yours. Thus always consult your financial advisor before getting into the frenzy of the buying. These are rumour mongering tactics where the hype is created by sending sms and also creating rumours in the market by creating articficial crests/upticks in the stock chart.

It is likely that all trading for the day for 10 July and 11 July 15 is likely to be annuled as it has been a scripted scam which has led to a massive losses to the traders. However in a free economy, should we get into it and will ask where financial wisdom of traders gone.

Be with a genuine tips provider and make money like professionals and make sure that rumour mongering is nipped in the bud and avoid getting emotional and just go with best intraday tips and relax with profit by 11:30 AM every day.

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