Santa Claus may have a surprise gift for smallcap investors in next 7 trading days
economictimes.indiatimes.comSanta Claus rally, typically associated with an upsurge in stock prices in the last five trading days of December and the first two days of January, may have already played out in Nifty ahead of its time, but the stage looks set for smallcaps.
A study of the performance of Nifty Smallcap 100 during these 7-day periods over the last 11 years shows that the index has delivered positive returns every single year during the last five trading days of December and the first two days of January.
Last season's Santa rally was the best in recent times, as the smallcap barometer jumped 7% in 7 days.
“Nifty Smallcap 100 index has never closed in the red during this period in the last 11 years. Thus, one must watch out for a Santa rally in smallcaps during this period,” Apurva Sheth of SAMCO Securities told ETMarkets.
Just like smallcaps, the bluechip Nifty, too, has a track record of giving positive returns in the last 19 out of 22 years.
“Thus, data indicates a strong reason to believe that the index could continue this trend this year, too.
However, having said that, one must note that the index has already seen a sharp up move after the state assembly election results, and we have also seen a small correction on Wednesday. Predicting where Nifty will end in this range can be anybody's guess,” Sheth said.
Caught in a consolidative phase, the index could trade in a broad range of 21,000 to 21,600 for the next seven trading sessions.
During the last two years, we had entered the last week of the year on a lower base when compared with that of early December or late November but that is not the case this time when the headline index has just scaled new all-time peaks.
“And despite Wednesday’s sharp falls, stocks and indices
