This month that year - Empirical Study for month of February

Following the routine empirical study of Nifty for a quarter, this time I chose to study its behaviour in one month rather, to get a more detailed and better perspective. Heres what I found in the past, 1995 onwards :-

1) The first year of my study, year 1995, Nifty lost almost 12% from the high of 1076 in the first week of February.

2) Following five years Nifty gained every year ranging from a net gain of approximately 8% to a whopping 31%, the latter being the highest gain so far. The details are provided further on.

3) The year 2001 again witnessed Nifty paring 7% of its gains from a high of 1416 to a low of 1314 in the week ended 23rd February.

4) The five years that followed, Nifty again saw an upside. However, these years the maximum Nifty gained was in 2002, a modest 13.88%

5) Years 2007 - 2009 witnessed a fall in Nifty every February. Year 2008, the year of financial crisis witnessed a 8.83% fall in Nifty from a high of 5545 to a low of 5055 in week ended Feb 27th.

6) 2010 again witness a net gain of approximately 7% in Nifty.

Coming back to the year 1996 when Nifty gained the highest, a whopping 31.24%. This gain was divided into three weeks. The first two consecutive weeks Nifty gained 13% each followed by 6% gain in the subsequent week. This year Nifty added 254 points from a low of 813 to make a high of 1067 in the week ended 16th February.

The events that took place preceeding and following the rally were:

i) NSE became the largest stock exchange in India in October 1995, a futile information though to explain the gain.

ii) April 1996 witnessed the launch of S&P CNX Nifty and the commencement of clearing and settlement by NSCCL.

iii) Also not to forget one of the major financial scams, the CRB scam expansed in the years 1992-1996, the amount siphoned off being an estimated 1200 crore.

Coming back to the present, February 2011 has so far witnessed the low of 5178 in week ended Feb 11th. If it is the low of the month or there will be a further fall is yet to be known.

Its "Happy Trading" from me ! Trade well, Trade safe !!!!






Disclaimer: The said technical analysis is a perception based on various charting methods. Trades on my opinion are to be done solely at your own discretion.