 "Number 13 has been unlucky for stock markets in 2024; will history repeat?")
The NSE Nifty 50 index has tanked nearly 1 per cent in intra-day deals on Monday, September 30, partly owing to profit-taking at higher levels. At 10:50 AM, the Nifty 50 index was down 0.8 per cent or 220 points at 25,960 levels.
That apart, the number 13 so far has been a jinx for the Indian equity market so far in the calendar year 2024.
Number 13 jinx?
There is a simple equation with regards to the Nifty performance and the number 13. The equation is as follows, as and when the difference between the spot Nifty 50 index and its long-term (200-DMA) daily moving average has risen above 13 per cent, the Nifty 50 index has inadvertently seen a knee-jerk correction.
Here's what has happened so far in 2024
The Nifty started year 2024, with a positive gap of near 13 per cent (12.9 per cent to be precise) when compared to its then 200-DMA. Thereafter, the Nifty went on to hit a closing high of 22,097, as the gap stretched to 13.4 per cent on January 15. In a matter of mere seven trading sessions, the Nifty 50 index corrected and dropped to a low of 21,137 - thus bringing down the gap between spot Nifty and its 200-DMA to 8.24 per cent.
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Similarly, the difference between the Nifty value and the 200-DMA peaked around 13.6 per cent on July 18. Over the next 11 trading sessions the Nifty consolidated and finally hit a momentary peak at 25,010 with the said equation at 13.3 per cent on August 1. In a matter of mere three trading sessions, the Nifty had plunged to 23,960 levels, and the gap tumbled to 8.3 per cent.
Will Number 13 halt the current Nifty rally, again?
Amid the recent rally, the gap between the Nifty and its 200-DMA shot-up above 13 per cent mark on September 26, at a high of 13.4 per cent. With todays near 1 per cent fall the gap remains around 12 per cent. On an average, the Nifty has declined around 1,000 points on the previous two occasions. Will history repeat itself, or does the Nifty has enough steam to re-write history this time around.
Technically, the Nifty 50 index seems on course to test the super trend line support at 25,650 levels on the daily scale; below which the 20-DMA stands at 25,485. As long as these two support levels are protected, the Nifty may attempt to bounce back and consolidate at higher levels.
Further, break and sustained trade below the 20-DMA can trigger a fall towards the 50-DMA which stands around 24,985 levels - thus in a way repeating the historic trend thus far in 2024. CLICK HERE FOR THE CHART
In case of pullback, the Nifty is expected to face resistance around 26,200 - 26,400 levels, shows the chart.
Nifty in 2024 thus far...
The Indian stock market has been on a roll in the calendar year 2024 with the benchmark equity indices the BSE Sensex and the NSE Nifty 50 scaling new highs on a regular basis. The Nifty 50 index for instance has zoomed past multiple landmarks, right from 22,000 - 26,000 so far this year.
In fact, the rally seems to have gained momentum in recent months as the Nifty 50 index has surged over 16 per cent in the last four months - in the process, has rallied past the 23,000, 24,000, 25,000 and now 26,000 landmark in a jiffy.
Robust domestic fund flows, encouraging cues from global markets, the recent US Fed rate cut, positive economic growth projections and hopes of strong corporate earnings are said to be the key drivers of Indian stocks so far.
Overall, the National Stock Exchange (NSE) Nifty 50 index has zoomed 20.5 per cent or 4,448 points thus far in the year 2024. Similarly, the Bombay Stock Exchange (BSE) Sensex has vaulted 18.5 per cent in the last nine months.
So far in 2024, there have been only two negative months - January and May 2024, wherein the Nifty ended with negligible losses of 0.02 per cent and 0.33 per cent, respectively. As of date, the overall monthly average for the Nifty stands at a healthy 2.29 per cent per month. At the current pace, the Nifty could well zoom past the 28,000-mark by the end of the calendar year 2024.