Will Oct-Nov cheer up Dalal Street this year too?

Mumbai: Traders, who consider seasonal trends, among other factors, to make market projections, could be inclined to place bullish bets on the Nifty till the year-end. In 14 out of the past 18 years, the Nifty has dropped an average of 4% in September. This has been followed by an average 9% gain in the October-November period.

"In the context of Nifty's historical performance spanning the last two decades, a distinct and noteworthy pattern emerges," said Dharmesh Shah, head-technicals, ICICI Securities. "Investors with an investment horizon of three months have found it profitable to initiate positions during the traditionally weaker month of September.

Shah said this seasonal trend aligns with other technical factors including the price structure model and classical chart pattern analysis, which project a range of 20,700-21,000 for the Nifty in 2023. The Nifty closed at 19,811 on Wednesday, up 121.5 points or 0.62%, extending the rebound in the market for the second straight day. The Nifty and the Sensex were up 0.9% on Tuesday with investors brushing aside worries about the impact of the Israel-Hamas conflict. The Nifty is down 4.4% from its all-time highs hit in mid-September.

Among the sectors, large-cap IT stocks are witnessing buying demand near key support, offering fresh entry opportunities with a favourable risk reward set up, according to ICICI Securities.

The brokerage expects auto and PSU stocks to outperform in the coming months after the bullish momentum stagnated following the run-up earlier in 2023. ICICI Securities maintained a positive stance on the pharma index, while it is bullish on power which has given a strong rebound after retesting a multi-year breakout led by PSU stocks.