Indian Stock Market has seen lot of positive and negative trends in the Election month. Lot of volatility was seen in the market for past 5 weeks. This process may continue until the election results are clearly visible. Many traders have lost their money in this volatile market, but investors were big gainers, Here, EquityPandit.com brings its analysis for the direction of stock market in the upcoming days.

Read the full post for better understanding and book profits by predicting the direction of the Indian stock market in the Election time:

Election Year 1998-1999

Election Year 2004

Election Year 2009

From the above statistics it is clear that it was tough to predict the market movement, during the Election month and it may continue after the results are been declared, if no one won with clear majority.

Also we can conclude following points from the above table:

1.   The one thing the equity market hates the most, is uncertainty. The next week thus is likely to see maximum volatility with traders and speculators riding the momentum – the build up first, some profit booking and maybe a sell-off before the big event. So Last Friday-sell-off may be the starting of the sell off.

2.   Market never accepts the government with left front or third front government. So one thing is very clear, be prepared for big sell off, it that happened.

3.   Market will be very comfortable if Congress or BJP will come with full majority. We may see this rally going towards 13500-14000, or we may say 20% kind of rally.

Conclusion:

1.   Investor must stay away till the election results don’t get declared. Remember cash is the king and if you use it at right time, it will give massive returns in a short span.

2.   Traders mostly loose their money in this type of market as fluctuation is always a killer for traders. So quality and timing of calls makes the difference. Just remember, as an investor you can earn as much as 100-150% in a span of two month but not as a trader because this rally surprises everybody. One week back EquityPandit.com had a discussion with few brokerage houses and they all were shock by this up move. Most of them generated losses, as they went short at a level of 11000-11500. Trading is always effective in a pure bull or bear market, but not an intermediate market like this.

3.   If you will see the investment figures of DII (Domestic Investors), it is very clear they booked the profit slowly and steadily without any panic. Also history suggest that big players stay away during such event and come up with big bull or bear depending upon the poll results.