15 August 2011

Nifty : Gap Down History

I did some historical data lookup to see what follows when Nifty Gaps down big, like it had done recently. So I scanned data from November 1995 (this is what NSE provided me) and looked for days with gap down of 2% or more.

Interestingly found only 9 instances of it, 3 of which happened on 3 consecutive days of this Month! Never have this happened earlier. The only time we had 2 consecutive 2% gap down days was on 31st March and 1st April 1997!

Of the 5 clusters (check table below), 2 instances are of where Nifty actually closed higher 5 days hence the last gap down day. The 1997 instance when Nifty gapped down 4% and closed 8% lower, also shows a cut of 2% at the end of 5th day. There are 2 instances when Nifty closed 5th day with cut of 6% and 2% at the end of 5 days.

Though the sample is very small and, the current situation is different we can approximate it closest to the 1997 panic. Where Nifty after the initial few days of losses tends to recover almost all. Now also I feel Nifty should be bouncing from these oversold level.


manu said...

hi anwar..
chart not visible

Tarique Anwar said...

hi manu, i have changed the settings of googlw doc, can you let me know if you can see the table now..?

manu said...

no anwar..still not..anyways where i can subscribe to your post to my gmail id..

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