In this article, we will have a look at the Nifty Monthly returns from 1998 to present (May 2017) and its performance in 2017 so far.
Nifty Monthly Returns
Nifty monthly returns from 1998-2017 have ranged from a lowest -28.06% in October 2008 to the highest +26.6% in May 2009.
Nifty has given positive returns for a consecutive 8 months in the year 2003 and year 2006-2007 followed by consecutive 7 months in the year 2004 and year 2014. In comparison, in 2017 we have 5 consecutive months with positive returns. One cannot be complacent that Nifty has reached a top since historical data suggests that there is still a potential for 3 more months with positive returns.
Nifty Performance in 2017
Here, I compare the Nifty’s performance in 2017 with Nifty’s average performance in last 5 yrs, 10yrs and 16 years. Data is from years 2000-2017.
As you can see from the chart, Nifty so far has far outperformed in 2017 compared to average performance in last 5, 10 & 16 years by roughly 16%, 13% & 11% respectively.
If Nifty keeps current pace with slope of the average nifty performance, then we are in for higher levels in Nifty over the next 7 months. We need to see if Nifty will keep outpacing the average Nifty returns or mean revert to the average.
Both monthly returns data & average performance of Nifty suggest that we are yet to see a top in Nifty in 2017. So keep trailing the Nifty with stop-loss, we might be in for a bull ride. Of course, this is by no means the final word, anything can happen & can change the outlook suddenly. Keep your eyes open, respect risk & have a good trade.