By Brijesh Bhatia
As the calendar flipped to 2025, fear gripped the heart of D-street, much like it does at the start of every new year. January has long been a notoriously volatile month for Indian markets, and this year is no exception. The Nifty50 has been riding a choppy wave of negative sentiment.
But as we dig deeper, is there a silver lining ahead for investors? Or is this a precursor to a prolonged bearish phase?
Also Read 6 reasons FIIs are selling Indian stocks like there’s no tomorrow… The Pharma Sector is Sitting on a Multibagger Opportunity… Controversial: Did value focused PPFAS just buy a momentum stock? Union Budget Trade Idea: Two Insurance Stocks to Track
Before diving into chart analysis and picking potential winners from the Nifty50, let us first explore the seasonality trends that have defined the Indian stock market over the years.
Seasonality: A Battle Between Bulls and Bears
Looking at the performance of the Nifty50 index from 1996 to 2024, January hasn’t been kind to investors. The average return during the month is a modest -0.23%, with the bears reigning supreme. January tends to usher in cautious market behaviour as traders prepare for the new year with mixed expectations.
Source: RZone, Definedge Securities
That said, historical trends show a pattern where the market tends to enter an accumulation phase by mid-January, setting the stage for potential positive returns in the months ahead.
Also ReadHere are 4 things you need to know about RIL shares ahead of Q3 results
If history is anything to go by, the second half of January into February often shows an uptick, suggesting that the next few weeks might hold promise for long-term investors.
But does the chart back this theory?
Let us analyse the Nifty50 chart more closely and assess whether it’s time to prepare for a market reversal or a deeper correction.
Nifty Weekly Chart
Source: TradePoint, Definedge Securities
When we turn to the Nifty weekly chart, a fascinating technical pattern emerges. The index has entered a crucial support zone, formed by the 62-week Exponential Moving Average (62WEMA) channel.
» Read More
