Moneylife research shows a probability that Nifty might close positive on 9 April 2012.
We witnessed that this week, although truncated, had closed with positive returns. As of Wednesday, Nifty was 0.52% up. How will Monday, 9 April, play out? A lot of investors wonder by the end of week whether the next trading session, the one after the week’s close, will be positive or negative. Investors harbour hope that the future will be better than the past.
A Moneylife research shows, from 1130 weekly data points collected all the way back from 1990, that there is a slight chance that Monday might open positive. Out of 1,130 weeks, we found out that there were 615 positive weeks, including the week ended 4 April 2012. Out of the 614 weeks that closed positive, in the past, we sought to find out how the next trading session fared. We found out that the next trading session opened positive nearly 3 out of 5 times.
The average Nifty returns of the trading session following the 614 positive weeks, regardless whether positive or negative is minus 0.27%; in other words - flat returns. The highest return was 17.7%, recorded on 18 May 2009, when the UPA government returned to power. The lowest return was minus 11.77, recorded on 28 April 1992, when the Harshad Mehta scam broke out. Both these events transpired over the weekend and had a big impact. However, the variance of all the returns was 0.04% indicating that returns are clustered around the average (or mean, in statistics jargon), without many extremes, such as the Harshad Mehta scam, skewing average returns. Even when we analysed all the positive returns data, the average returns was only 1.42%. Barring any unforeseen events, global or local, that could have an effect on how markets open on Monday, 9 April 2012, returns may not be extreme, in either way..jpg)
Having outlined the scenario, will Nifty close positively on Monday? Probabilities indicate that there is a positive albeit slight chance that Nifty will bring cheer to investors, with returns expected to be close to average.
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