Monday, February 15, 2010

Leading to the Budget

Is there a pattern in the last two weks of Feb, leading to the annual budget?

Here is th performance of the Nifty, from 1995 to 2009. The fields are:
Last trading day of Feb, Nifty value onafter Feb15, Nifty on last trading day of Feb, Change

19950228.00 1032.64 1014.72 -17.92


19960229.00 1051.99 992.51 -59.48

19970228.00 1009.45 1053.55 44.10

19980227.00 974.55 1060.75 86.20

19990226.00 970.25 941.20 -29.05

20000229.00 1744.50 1654.80 -89.70

20010228.00 1393.35 1351.40 -41.95

20020228.00 1150.00 1142.05 -7.95

20030228.00 1036.00 1063.40 27.40

1040227.00 1913.60 1800.30 -113.30

20050228.00 2098.25 2103.25 5.00

20060228.00 3017.55 3074.70 57.15

20070228.00 4047.10 3745.30 -301.80

20080229.00 5202.00 5223.50 21.50

20090227.00 2948.35 2763.65 -184.70

In the past 15 years, the Nifty saw 9 declines, 6 advances between 15th Feb and the last trading day in Feb. In many years, due to elections, the budgets were not presented in Feb therefore the data is not truly reprsentative. Yet, this is what we have for the second half of Feb. The data suggests that the bias is slightly to the downside.
 
More inputs are welcome.

3 comments:

Niftic said...

You have used the end of feb as close, But I think for any suitable trade we should consider, Expiry of Feb as on the last Thursday of Feb.
So I have used that in my blog:
niftron.blogspot.com

men said...

Mr. Sudarshan, in one budget the STT was raised drastically and the market tanked, subsequently the FM PC reduced the STT, and after that the market recovered. May be one could look at the returns as on 31-3.
This year the FM may add a draught cess and God know how he will tinker the STT/LT gains and should he touch these the hell will break loose. Any ideas on what we should buy in options? One view is buy strikes 4-500 points away.

tanmay said...

Hello sir,
What according to you will be a better strategy to use before budget:
a) strangle
b) straddle
c) doing nothing
d) or would you suggest any thing else.

thankyou.