Santa Claus Rally in Nifty 50? | CA Rachana Ranade

"we try to analyze the Nifty returns especially during the seven trading sessions after Christmas so this is a data from 2012 to 2021 where you can see that out of 10 years 7 years Nifty has given up positive returns, not only that we can also understand that nifty 50 has risen on an average 1.45 percent during these seven days in the last 10 years."

"In fact index historically has risen 70 percent in this time frame of seven days as against an increase of 60 percent average during any seven days during the balance part of the year"

"Santa rally is said to be a Market Anomaly"

"Santa Claus rally as per this involves a rise in the overall index for a period of seven trading days post Christmas"

"This will typically involve last four to five trading days of December and first two to three trading sessions of the month of January."

"This was discovered by Yale Hirsch who is the founder of the popular investment tool called as Stock Traders Almanac in 1972 and for this entire study he had taken the time frame or he had considered the time frame from 1950 to 1972."

"this was recently covered in a Newsletter which was published in 2019 and wherein they had taken the time frame from 1969 to 2019 and as per this Newsletter it had it had mentioned that index had risen almost 1.3 percent on an average during these seven trading sessions and overall index has historically risen 76 percent of the time during these seven trading sessions."

"Well this rise is way better as compared to any other seven trading sessions during the entire year."

"typically institutional investors tend to go on a vacation and it is more of retail participation which happens in the market during this period of time and typically retail individual investors are ideally supposed to be bullish about the market so they keep on going on the buy side rather than sell side taking it taking the market a little bit higher"

"To get some tax benefits you book the short term losses and you again enter into the same stock so that you keep on holding the position in that stock right so what could retail individual investors do? They could sell their stocks at the end of December and immediately buy the same at the very beginning of January, so this can again pent up the demand in the early days of January"