Saturday, 1 April 2017

100% Working

I made a post in year 2013 soon after I started blogging.  Click here to read that post.  Unfortunately, this is the post which has been least appreciated by the readers.  I do not know the reason, but the fact is that the strategy has been working 100% since year 2003, since the start of derivatives trading in India. So if it has worked since its inception for last 13 years, cannot we expect it to work again and again?

Here is the monthly chart of Nifty demonstrating the same is working for last 4-5 years too.


You would notice that whenever the monthly Nifty candle is able to close above the January month high, the rest of the year it remains up or continues to go up.  In year 2013, it first made a false break of January month high, could not close above it but when it closed above it in October, rest of the year it remained higher. In year 2014 after giving a close above Jan month high in March 2014, it never tested that level. In year 2015, it could not give a close above Jan month high, so for rest of the year it remained lower. In year 2016, it was able to successfully close above Jan month high in May 2016 and after that went up significantly.  Now in year 2017, it has been able to close above Jan month high in February 2017, so for rest of the year we can expect Nifty to remain bullish and gain significantly.

How to benefit from this strategy?
It is simple. Whenever Nifty gives a monthly close above the January month high, we can get rest assured that for rest of year, it will go only in one direction and that is up.  We can buy good quality equity mutual funds at that time and hold on to them till November or December of that year at least and make good gains.  We can also buy the index ETFs like Nifty Bees. These are one of the safest ways to generate 10 to 12% kind of returns in very short time period. Last year someone could have bought Niftybees at end of May month around 820 and sold it around 910 in September.  In just 4 months it generated more than 10% of returns. This year, I would say still it is not late.  It is only couple of hundred points above the level of entry.  If someone has funds lying in banks generating 6-7%, he or she can deploy these funds in Niftybees or a good equity mutual fund and expect around 10-12 of gains or more.  If someone wants to wait for the correction, then let it pull back to around 8700 level or below 9000.

Peter Brandt, a legendary traders has set the targets like 10287 or 12000 for the Nifty.


Finally, this is also another way to generate some steady flow of income from the markets with almost negligible or least minimum risk. Buy when Nifty's monthly close is higher than January month high and exit with good gains in the same year.

4 comments:

  1. this is excellent one. in fact have read about this last year also from you .. after jan 2016 high was crossed

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  2. Thank you. January effect

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  3. Thanks sir. Yes it has benefited me. I did not redeem MF investment for this very reason in 2016. Thnx

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