January Effect

The month of January is yet another trend indicator in the stock market.Which indicates how market is going to perform in the months to come, provided the political & economic situations remain stable . It has been seen that when the market goes up in the month of January there is about 80% probability that market will give positive returns for the whole year.

It has also been observed that the market rises up in between the period of last trading day of December to 5th trading day of January. The reason for this is, many investors sell of their portion of stocks to cut tax-1osses and bargainers do heavy buying in these kind of stocks. of Course there are times when market behaved against January effect during the years 1966, 1973, 1990, 1994, and 2002, due to war situations and recession.