Book Reviews
The New Normal

An analysis of the new reality of global financial flows

I have reviewed hundreds of books...

Premium Content
Monthly Digital Access

Subscribe

Already A Subscriber?
Login
Yearly Digital+Print Access

Subscribe

Moneylife Magazine Subscriber or MSSN member?
Login

Yearly Subscriber Login

Enter the mail id that you want to use & click on Go. We will send you a link to your email for verficiation
An Asian Dawn, Soaked In Red

Asian history—in the aftermath of World War II

They came, did business, conquered but were...

Premium Content
Monthly Digital Access

Subscribe

Already A Subscriber?
Login
Yearly Digital+Print Access

Subscribe

Moneylife Magazine Subscriber or MSSN member?
Login

Yearly Subscriber Login

Enter the mail id that you want to use & click on Go. We will send you a link to your email for verficiation
Is a nine-week straight rally likely?

The stock markets have rallied strongly for the past eight consecutive weeks. The historical trend favours a continuation of the rally, but will the market prove it wrong?

The Sensex has been on a rally for eight consecutive weeks now. From 16,153 on 11 February 2010, it has rallied to a high of 17,692 for the week ending 1st April. Will this rally continue or is it finally time for the index to shed some of its gains? The study done by Moneylife looking into the past performance of the Sensex when the index had rallied similarly for weeks has fairly accurately indicated that the rally would continue into the sixth, seventh and eight week. The study is based on weekly market data from 5 January 1990. Although the study showed that the chances of the index continuing its momentum in the eight week are exactly 50%, the markets did go on to register a marginal rise (0.30%).

Will the market sustain its upswing into the ninth week also? During this period of 21 years, there have been seven instances (excluding this year) of a sustained rally in the Sensex for eight straight weeks. What happened in the 9th week in these seven cases? In as many as five instances, the subsequent week has reported a continuation in the Sensex rally. That translates into a meaty 71% positive outcome.

On these occasions, the Sensex has risen by an average of 2.69%. The index has seen a maximum gain of 4.30% and a minimum gain of 0.90%. However, in the two instances where the index has reversed its upward climb, it has witnessed an average fall of 2.5%, with a maximum fall of 4.70%.

Historical data definitely suggests that the Sensex winning streak will roll onto the 9th week. However, it would be wise to note that liquidity will play a key role in supporting this rally from here onwards.

The sustained rally in the markets so far has been fuelled by strong inflows from foreign investors and rising global indices. Reducing unemployment figures in the US and positive developments in the Greece debt situation have aided the global markets. For the Sensex to continue its upswing, a lot will depend on what the central bankers around the world choose to do with monetary policies.

User

COMMENTS

lowkeyfan

7 years ago

Beginning next week, in say no more than another 9 weeks, There is a 95% chance per my systems to anticipate a move to 4000 on the Nifty. Therefrom, in say another 9 quarters a Nifty of 7500 is quite feasible.

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)