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October to January-Historical trends

Wednesday, September 30, 2009 Leave a comment Go to comments

The markets have rallied about 15% in last 3 months with individual stocks rallying anywhere between 15-50%. Does it make sense now to book profits?

The answer is both Yes and No.

Yes- because if you are sitting on huge profits in your short term trading portfolios, it is prudent to take some money off the table. This is especially true of stocks that have run up quite a lot. I booked my short term profits in PSU banks and Pharma and now moved on to Oil and Gas sector and put my bets in the likes of ONGC and Reliance Industries.

No- because in the slightly longer time frame, this rally can go much farther than you think. So it makes sense to hold on to your quality stocks till they become multibaggers for you.

Technically, 4850 might be the level to watch in the short term. On the upside 5100 and 5350 are possible. Personally, I like the current market action as it is very orderly and non volatile. The market is testing the patience of the bulls as well as bears.

Historically bull markets move further up in October to January time period.

Here are the quick stats (NIFTY closing basis):

1999- 1413 to 1546 (+10% )

2003- 1417 to 1809 (+20%)

2004- 1745 to 2057 (+20%)

2005- 2601 to 3000 (15%)

2006- 3588 to 4082 (15%)

2007 – 5021 to 5137 ( 3% ) – Markets crashed in Jan 2008 after touching 6357

2009 -?

(Please note that 2000-2002 and 2008 were bear markets)

Currently we are in a bull market, so probability is very high that we are going to run up in October to December. This doesn’t mean that history will repeat itself, but trading is all about having odds in your favour.

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  1. omguruom
    Sunday, October 4, 2009 at 12:16 pm

    Please some suggestion on green technology stocks which will give good return in the period of 3 to 5 years….

  2. omguruom
    Sunday, October 4, 2009 at 12:13 pm

    Your articles are very impressive. Please provide more inputs like these articles.

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