Nifty 50 has ended today on a negative note at 22,082. This is the tenth consecutive negative closing for Nifty. It is the first time ever that Nifty has closed in the red for 10 consecutive sessions. That's not all...February was the worst negative month for the Nifty 50. Out of 20 trading sessions it closed in the red in 18 sessions. Thats a negative closing 90% of the times.
We did a backtest to check what happens one months after the index closes for 8 or more consecutive negative sessions. Since 2002 there were nine instances of eight or more days of consecutive negative closing. The index closed on a positive note one month later in six out of these nine instances. The average one month forward returns was 2.68%.
Date | Nifty 50 Closing Price | Consecutive Close below Previous day’s low | 1 Month Forward Returns % |
02-Aug-2002 | 955 | 8 | 5.85% |
28-Oct-2002 | 923 | 8 | 12.30% |
04-May-2011 | 5,537 | 8 | 0.42% |
21-Nov-2011 | 4,778 | 8 | -3.46% |
02-Aug-2013 | 5,678 | 8 | -2.24% |
27-Mar-2015 | 8,341 | 8 | -0.67% |
19-Feb-2019 | 10,604 | 8 | 8.75% |
10-May-2019 | 11,279 | 8 | 5.25% |
28-Feb-2023 | 17,304 | 8 | -2.04% |
14-Feb-2025 | 22,929 | 8 | ?? |
28-Feb-2025 | 22,125 | 8 | ?? |
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| Average Gains | 2.68% |
It will be interesting to watch if we see a bounce back from such historically oversold levels and consecutive negative losing streak.
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