This is the third in our series of looking at Nifty Stats and today's focus will be on the Day of week performance and see if a particular day has any relation to any other during the week. The exercise is purely academic and may not be a trading strategy.
However the data can be used to adjust your bias based on past records.
In our Nifty daily stats (2) we looked at Initial balance or IB of the day. If you had used the strategy explained in the last para of that post this week, then on Monday you could have had an upside breakout , Tuesday and Thursday downside breakouts and on Wednesday and Friday the IB band trade would have clicked. The point is that you would have had one successful trade every day of the week based on the strategy.
You can find that post here- http://www.vtrender.com/content/nifty-daily-stats-2
Let's look at today's focus on the days of the week and see what the chart throws up.
I have taken data from 14/05/2009 or a period of 3 years for the data. The chart is below :
Click on the chart to enlarge.
The chart above has the Nifty in the top most pane and shows the daily change based on Open minus Close.
The pane below Titled Monday has data of only Mondays in blue followed by 5 empty spaces till the next Monday
The pane below that titled Tuesday has data of only Tuesdays in light blue followed by 5 empty spaces till the next Tuesday
The pane below that titled Wednesday has data of only Wednesday in light green followed by 5 empty spaces till the next Wednesday
The pane below that titled Thursday has data of only Thursdays in Orange followed by 5 empty spaces till the next Thursday
The pane below that titled Friday has data of only Fridays in brown followed by 5 empty spaces till the next Friday
The chart throws up possibilities each open to their own interpretation.
When the big uptrend began at the start of the year every Tuesday ( 2nd Pane) was a big Up day during all of Jan and Feb ( with one exception)
Similarly when the uptrend halted in March, every Monday was a downday.
I've put up the entire data according to the day of the week in this sheet here and one can draw their own conclusions : Nifty change based on day of week.
Coming to the second objective of the post, to see if there was a co-relation between any two days of the week, we added up the net change of all the Mondays ( and the Tuesdays, wed etc) and came up with the chart below
The chart above is a weekly chart from May 2008 with the panes below showing the net performance of every day of the week added up from the last four years.
The bottommost pane is the sample size of 208 weeks equivalent to 4 years of data.
The chart shows that Monday and Tuesday have mirror images, as also Wednesday and Thursday.
Thursday and Friday are very bearish currently and Monday and Wednesday are your best bets if you want to remain on the bullish side.
Some other observations :
a) Wednesday has the ability to close above the open price and hold gains
b) Thursdays and Fridays are decidedly bearish with price going below the open price more times than not.
c) If Monday is an Up day then Wednesday will also be up
d) If Tuesday is down , then Thursday and Friday may also be down days.
In Closing, the Oft repeated rule of trading- Past performance is not indicative of futures results!
Enjoy your weekend.