This idea comes from Eddy Elfenbein of Crossing Wall Street fame. He has done a similar analysis on the Dow and I wanted to see what outcome would I find if I apply the same concept to the Sensex (owing to it having a much later history than CNX Nifty).
The Chart below outlines the fact that Sensex has been found range-bound from mid October to early December before we follow the Santaclaus rally that is seen in the US.
Do note since I have averaged around 34 years of data, this has not much of predictive power, but at the same time gives us a visual of how Sensex has moved over the years.
The period from mid March to early October seems to be the time when the markets have been the strongest and trending strongly.
So, without much further ado, here is the Chart 🙂
[Click on the chart to enlarge]
Postscript: Data used for the Chart above starts from 01-01-1981 and ends at 28-08-2014