Sunday, January 31, 2016

How has February fared after a weak January?

This time I am taking a break from the usual weekly posts and trying to analyze statistically how the month of Feb has fared? Feb usually is the month of hope with the Union Budget coming up. Let us take a look.


1. In the last 15 years, Februray has been negative only 6 times which means generally February is a positive month.

2. When the month of January has been negative, February has been positive only once has been Jan, Feb both negative.

3. The maximum gain in the month of Feb has 6.2 pc and loss 5.7 pc. Taking an average swing of 5 pc we get a range from 7941 to 7184. This means book profits closer to 7950-8000 and start buying closer to 7200-7300.

4. The FIIs bought on the last day but still they ended up selling about 14356 crores for the month.

5. The 100 week moving average also comes to 7969. This means 7950-8000 becomes a very crucial resistance for the markets.

6. The entire down move could have ended at 7241 or 1 last leg is pending. This could be possible as corrections usually last for 13 months and should end sometime in April.

In any case, 7200 to 7600 is a very good buying range for long term and 8000-8200 is a range where profit can be booked to see if the markets rise further.

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