Should you trade in Satyam ?

The answer is NO. I wanted to make this clear before discussing why this should be so.
Share prices have fallen due to ‘News’. We will not discuss what the news is: it could be any piece of information that has surprised the markets, causing a decline in prices. When we have a news reversal, the Market has digested a peice of news and has put a share price based on the new information.

For Satyam, the price is Rs 40/- which is the close on the day of the ‘News’. So far the share price remains below this value, the Market is giving a thumbs down to any subsequent rethinking.

If Satyam were to go above Rs 40/-, then you have a message from the market that maybe any declines below Rs 40/- were an overrection. There is a trading opportunity to buy above Rs 40/- with a stop below Rs 40/-. Remember, the stop is an essential part of any strategy. If there is a gap up open, which results in a wide stop loss, you should just leave the trade.

But, even if the price crosses Rs 40/- I do not recommend buying. Why ? Because of volatility.Volatility has shot up sky high which tells us: do not touch this share.

In a lighter vien:
Jayesh Bhope, in a comment given to my entry It happens only in America says:
“4500 shares (!!!???) that makes it a 7.6 lakh investment in 1 share>>??…..Are you sure you have typed those figures right>?? If Yes, then it is “Total madness”, and nothing else…”

Then, he writes:
“Gr8 courage….In that much money you can employ 2-3 CNBC trading gurus…”
My thoughts: Maybe, maybe not!