How can I use Seasonality Insights to make investing or trading decisions?
Consider the example of NIFTY Pharma shown in the Seasonality Chart.
The chart displays monthly returns across multiple years, helping you understand how the index has historically performed during each month. The + Yrs % and - Yrs % rows show how frequently a month has delivered positive or negative returns, while the colour-coded heatmap highlights the strength of those returns.
In this example: Historically, July has been a positive month for NIFTY Pharma 86.7% of the time. Several years have also recorded strong gains during July, suggesting that the month has historically been favourable for the Pharma sector.
Similarly, April and June show a + Yrs % of 75%, meaning the index has generated positive returns during those months. On the other hand, January and February have a + Yrs % of only 37.5%, indicating that the index has historically delivered negative returns more often than positive returns during those timeframes.
Using these insights, an investor or trader may choose to:
- Monitor a sector more closely before historically strong months.
- Shortlist stocks within that sector for further analysis.
- Look for technical or fundamental confirmation before entering a trade.
- Exercise greater caution during historically weak periods.
What If...
| Scenario | Explanation |
|---|---|
| A month has a high Positive Years % but a low Average Monthly Return | The instrument may have delivered gains consistently, but the gains may have been relatively small. |
| A month has a high Average Monthly Return but a lower Positive Years % | A few exceptionally strong years may have influenced the average return. |
| A historically strong month performs poorly this year | Seasonal trends are based on historical observations and may not repeat in every market cycle. |
| Can I use Seasonality Insights as a standalone buy or sell signal? | No. Seasonality Insights should be used alongside other forms of analysis and risk management. |
Last updated: 23 Jun 2026
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