Sunday, January 6, 2013

How have the markets traditionally performed in January?

It is a New Year and a very Happy New year to all. The markets typically tend  to make a top in January February period. Let us look at how markets have performed in January typically.



1. In the past 12 years, 10 times markets have been performing alternate to the performance in December. Which means if markets were positive in December than negative in Jan and vice-versa. This year the markets gained 0.4 pc in December so should be net negative for the month of Jan with the same logic.

2. The markets in the past 12 years have always gone below the December closing irrespective of where they close finally. December closing was 5905 this year, so there should be 1 dip below 5900 even though the market may close higher for the month.

3. In 1 year it has also happened that the market even though is mildly positive in December, has gained around 3 pc in January if that happens, then we may be at around 6080 on a closing basis for January.

4. A big fall in the month of January on the basis of statistical data can be ruled out. The range which comes into play is 5880-6080. If we put in a filter of +/- 50 points, then effectively the range for January is 5830 - 6130

5. The markets have rallied on fiscal cliff being averted and the next cliff will occur around end of Februray.

6. The Gilt funds have done exceedingly and the 10 year bond rate is down 7.94 % from 8.14 %. The funds have given an absolute return of 2.5 % in the past 1 month.

7. The Q3 results will come towards the end of the week starting with Infosys on next Friday and I expect a small dip till the results come in. We may test the lower end of the boundary arrived at for the month of January which is 5830-5900 range before going up.

All the picks selected by me and Lakshmi have done exceedingly well and anyone who invested in them would have got magnificent returns.

1 comment:

  1. which are those picks selected by u and Lakshmi and let me know their targets also?

    ReplyDelete