Potential best-performing stocks for December: A seasonality analysis

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Subscribe to enjoy similar stories. Stock trading involves multiple analysis methods to evaluate trends and make informed decisions. Traders and investors often rely on technical, fundamental, and derivative analyses to guide their choices.

However, another often underrated form of analysis that can be particularly useful is seasonality analysis, especially for predicting potential best-performing stocks for December. Seasonality analysis uses historical patterns to predict how a stock or market will perform in a given timeframe, usually based on the time of year—a relevant technique now as we approach the year's final month. Profit Pulse explores the concept of seasonality analysis, how it works, and how to apply it to assess Nifty50 stocks to identify potential best-performing stocks for December.

Before we discuss how to apply seasonality analysis to identify potential best-performing stocks for December, let’s analyse the current market environment. The Nifty50 has experienced a sharp reversal recently, moving from 23,300 points on 21 November to 24,300 points on 25 November, supported by the 200-day exponential moving average (200DEMA) and suggesting strong bullish momentum. The 200-day Exponential Moving Average is a key technical indicator used by chartists to assess the long-term trend of a stock.

When an asset's price is above the 200DEMA, it suggests a bullish trend, indicating that the asset has been on an upward trajectory for a prolonged period. Conversely, when the price is below the 200DEMA, it may signal a bearish trend. This makes the 200DEMA an essential tool for determining market cycles.