Crazy chart : please solve this riddle

#1
This chart (see attachment) raises many questions ... here is a company (code name PIOOVE on ICICI Direct : earlier called Pioneer Overseas, now Sriram Overseas) whose scrip was quoted Rs 1.5 in end April, now over 60, and is planning - or has just had ? - a preferential issue to an FII, at a premium of around Rs 50.

My questions:

- scrip movement from end april till mid May (when I first coincidentally spotted and downloaded the chart) looks terribly like circular trading (unable to upload chart again as its there on another thread " what determines the day's opening price")

- how come the share was quoted at barely 1.5 when the co was already quite profitable (with a EPS for 04/05 of around 6 , and a PE multiple of <1 !!!) see link http://content.icicidirect.com/research/LatestQuarterly.asp?icicicode=pioove

- was the share rigged up in anticipation of the preferential issue to the FII

Maybe there are simple answers (and absolutely no hanky panky inderlying) to my questions ... I am curious to know.

PLEASE SOLVE THIS RIDDLE ( and win my honest admiration)
 
#3
I am amazed, more than dismayed !:confused:

Over 50 guys read my post above, and none has found it worthwhile to add comment. Only 1 in 2 has bothered to see the chart which I attached ...

Consider this : I attached a chart of PIOOVE (earlier Pioneer Overseas, now called Sriram Overseas) which shows how this 'penny' stock rose from under Rs 2 to Rs 33 in just ONE mth : end April-end May. This movement looks terribly like 'circular trading' in a separate chart for the period which I attached to another post (and hence cant attach here)

Thereafter the company announced that an FII ( Newbridge) will be made a preferential offer at a premium of around Rs 50. Today the Board announced another issue to an affiliate at a similar premium.

Now the scrip is sitting pretty at over Rs 60. I wonder if the FII in question knows the previous chart trend (2 to 33 in one month)

Does nobody...absolutely nobody surfing this site ... find this whole matter strange ?

Come ... traderji, amitbe, karthik... dont u have any views whatsover ... or do u find such things normal and coomonplace ?


Maybe I am missing something...maybe there is a perfectly logical reason for the share spurting from 2 to 66 in 8 mths ... can someone with inside knowledge of the group throw some light??

Much obliged.
 
#4
Hi agilent,

Sorry but the chart does not look very irregular, have seen this type of movement in US/UK charts before.

You must remember that what we see on the chart is actually its perceived value (by traders and professionals) as opposed to its intrinsic value. Maybe the stock has only just gathered a following or the professionals have only just began to actively create a demand/ interest in its activity. what has the news coverage been on it recently?

Be interesting to hear some other views.
 
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#5
Hi Market Wizard
First of all thanks for taking the trouble to see that chart .

I am surprised u find nothing irregular (mainly in the earlier part : April/May trend) .

Do me a favor... pl look for my post on "what decides the days opening price" where I have attached the chart for the period 27 April to 12 May for same co ( PIOOVE). I'm unable to attach that again on this thread since the site config/rules do not allow

If that isn't circular trading, I dont know what is ?

Comments ?
AGILENT
 
#6
Hi Agilent,

The reason it does not look irregular is for the exact same reasons you have stated. This sort of chart activity is nothing new, though some are more blatant than others.

I believe this often happens in the early stages of a stock flotation while the professionals attempt to distribute it amongst funds and institutions in order to create a mangeable floating supply.
 
#7
Market Wizard said:
Hi Agilent,

The reason it does not look irregular is for the exact same reasons you have stated. This sort of chart activity is nothing new, though some are more blatant than others.

I believe this often happens in the early stages of a stock flotation while the professionals attempt to distribute it amongst funds and institutions in order to create a mangeable floating supply.
MW
I wonder if u saw that chart I referred to (April- May 05) posted on the other thread : "what decides the day's opening price"

If you havnt , pl do so ... you may see something new

If you cannot ,let me know how to send u a pvt msg and I will mail u the chart
Thanks
PS the scrip rose from 2 to 33 in TWO mths, not ONE (regret error
 
#8
Market Wizard said:
Hi Agilent,

The reason it does not look irregular is for the exact same reasons you have stated. This sort of chart activity is nothing new, though some are more blatant than others.

I believe this often happens in the early stages of a stock flotation while the professionals attempt to distribute it amongst funds and institutions in order to create a mangeable floating supply.
Hi Market Wizard
Just discovered you are domiciled in (citizenof ?) UK , and may therefore not be familiar with Indian Markets

I would like you to know that in Inida IPOs are not made at as low as Rs 2 , which is what this scrip was before spurting to 33 in 2 mths

You say such movements are comon in USA/UK... really ? which scrip u know has been an 11 bagger in 2 mths ?

I am contemplating reporting this unusual trend to our market regulator.

AGilent
 

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