Many thanks to the domestic investors who stood firm against the FII selling (who turned net buyers in the last couple of days of July)

There was some other positive news as well that helped the index pos heavy gains, especially the Fed commentary (which hiked the rate by 75 basis points to curb inflation but promises to ease rake hike going forward) followed by the USD/INR equation, where INR doing a good job thanks to RBI intervention, good monsoon in the country, and better Q1 FY23 numbers posted by the Indian firms.

Also Read: IMPORTANT Q1 RESULTS FOR NEXT WEEK: 1 TO 6 AUGUST 2022

The Way Forward – August 2022 Series

Since the new series (August 2022) has just started, index, as well as options traders, would love to know where the Nifty ends at the end of the month; will it end in green again or red?

To answer this question, again, historical data will prove to be very helpful.

Last 10 Years

If we consider the last ten years’ data, starting from FY 2012 to FY 2021 (in particular the August series), it shows bulls managed to get marginally an upper hand on Dalal Street, where the Nifty fell four times and gained as many as six times.

In fact, in these 10 years, there were four instances where Nifty has given more than 2 percent of positive returns (8.7% in 2021, 2.8% in 2020, 2.9% in 2018, and 3% in 2014) and only two instances where it fell more than 2 percent (6.6% in 2015 and 5.8% in 2013).

Last 20 Years

If we stretch this study further and take twenty years of data (2002 to 2021) into consideration, history suggests that there have been at least 14 instances where the Nifty index closed in green and 6 instances closed in the red.

In these 20 years, there were 8 times where the Nifty index rose more than 2.5 percent (highest of 14.4% in Aug 2003, 8.7% in 2021, 8.6% in 2006, and 5.4% in 2002) it fell 8.8% in the year 2011.

Last 28 Years

Taking the study forward and keeping the last 28 years of the August history into account, the index has generated more than 2.5% returns 11 times and 6 times negative 2.5% returns.

Now What –

Investors and traders’ nerves would be tested in the upcoming month, especially in the first week, where we have the Reserve Bank of India (RBI) meeting on the 5th of August and some important quarterly results like ITC, Zomato, Adani Group companies, SBI, and others.

On the technical front, the Nifty has closed above its short-term and long-term moving averages, and there is a broad range intact of 14200/300 on the lower side and 18000 on the higher side.

In a nutshell, if history is to go by, the chances of the NSE benchmark index delivering a positive return is likely in August 2022 (however, there may not be as good as July 2022)

Let’s see how it works out…

Disclaimer: The contents and data presented here are just for your information & personal use only. While much effort is made to provide the information, I (Vishal Dalwadi) or “FinBlab” do not guarantee the accuracy, correctness, completeness or reliability of any information or data displayed herein and shall not be held responsible.

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