It is a interesting question from a sentimental point of view. Everyone gets excited especially the media channels and speculators when a popular chairman rejoins the board or a Resigns from the Board. Some how you need to understand that markets are crazy and illogical. So today I brought two case studies to understand how sentiment worked in the past especially when a popular Executive Board Member Joins/Resigns.
Mr.Narayanamurthy Chairman – Rejoins Board
On 1st June 2013 Mr. Narayanamurthy rejoins Infosys Board as Executive Chariman. Quite a positive sentiment revival for Infosys. People rejoiced before the stock market opens. On monday (3rd June 2013) market opened with a gap up along with 200 points price movement from the previous days close in just first 2 minutes of the market open. And then shorter term top is made for that week.
Infy Futures 1 Min Charts June 2013 Contract
Jubilant CEO Ajay Kaul Resigns
On 20th September 2016, Jubilant CEO – Ajay Kaul resigned after 11 years at the helm of the India franchise of Domino’s Pizza. Quite a serious negative sentiment for investors. Stock Price opened gap down and dropped almost 8% when the market opens and made the bottom in the first 15 minutes and that is the bottom made for the week.
Jubilant Food Futures 1min Charts – Sep 2016 Contract
Moral of the Story : Markets Reacts to those momentary reactions it favors the crowd sentiment initially and it is a impulsive reaction which doesn’t last for a long time. Initial direction is always in the favor of the crowd thinking!
Now lets have a live study on 26th Oct 2016 how the markets reacts to the recent Cyrus Mistry Resignation and Ratan Tata takeover of Tata Group
httpv://www.youtube.com/watch?v=EwgA3Y11djI
May be market might have some ready made answer!
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