Alpha Ideas

Note:This post should not be considered as investment advice and is not a recommendation to buy or sell.

Seasonal anomalies is something that I have always been fascinated with.These anomalies are more obvious in the commodities market-For example, gold rises ahead of Dhanteras, sugar rises before Diwali, fruit prices go up during Ramazan etc

Do such anomalies exist in the stock markets?Some sectoral anomalies do exist-cement stocks are usually soft during the rainy season,PSU stocks get hammered in the runup to the elections etc.

What about specific stock-wise,day-wise anomalies?I believe they exist but on a probabilistic basis.Say they will work out 70% of the time but overall the expectation will be positive.

As an example,take today-Independence Day Eve.The data suggests that this day is good to go for the following market neutral strategy:long IGL and short HindPetro.

Will the trade work out?Will come to know by close of trading session today !

Today’s trade setup didn’t workout-IGL (-0.64%)/HindPetro (+1.05%) (Despite going ex-dividend)