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Monday, October 17, 2022

Nifty : Step Sum Analysis 2022

 

Step Sum is the form of a new technical tool to evaluate the psychology of the market. It has been developed by Mark Lundeen and it offers a unique

insight into the psychology of the market. The step sum is simply a running total of UP vs. DOWN  days.

The step sum is a single item  Advance – Decline Line. In other words; if Nifty is down from the previous day’s close, we give it a value of (-1), if they end the day up from the previous day’s close, we give it a value of (+1). So a step sum plot is merely the net sum of up and down market days over time.

Let me build up the algebra for evaluating the step sum ;  X is number of UP days  (simply referred  herein after as UP)  and Y is the number of DOWN days (simply referred  herein after as DOWN)  and the STEP Sum  is equal to  [ X – Y]  Accordingly, the following narrates the Table :

1).          Step sum is 0 (Zero) when Nifty was 1000 , on the starting Day of OHLC value (02 Nov 1995);

2).          On 273th Day (04 Dec 1996) , the step sum reached a value of minus 35 as a result of 119 UP & 154 DOWN  (as  per DATA  in the Table)  & Nifty closed at 788 with Nifty reaching a Significant Low (775)  ; a key observation lowest step sum  from my studies of 6700  days of the NIFTY Index ;

3).          On 1073th Day (23 Feb 2000) the step sum turns Positive at 3 as a result of  538 UP & 535 DOWN & Nifty closed at 1696.40  with Nifty reaching a Significant High (1818) 

3)           On 1,314 th Day (09 Feb 2001), the step sum reached a value of 24 as a result of 669 UP & 645 DOWN & Nifty closed at 1406 with Nifty reaching a Significant High (1416) ;  a key observation  Highest  step sum  from my studies of the initial 2561 days of the NIFTY Index

4)           On 1468 th Day (21 Sep 2001) , the step sum reached a value of minus 2 as a result of 733 UP & 735 DOWN & Nifty closed at 854 with Nifty reaching a Significant Low (850) ;

5)           Subsequently the step sum hovers around  a low value reaching minus 4  and  on two occasions reached a ZERO value , viz., 1690th Day  when UP days = DOWN days (840)  and again on 1742th days (30 Oct 2002) when UP-days = DOWN-days (871) ;

6)           Thereafter, the step sum  kept growing steadily  reaching 228  when the Nifty reaching  Significant High (6357) on the 3046th Day (08 JAN 2008)  with 1637 UP  & 1409 DOWN  and Nifty closing at 6288 ;

7)           On 3116th Day (22 Apr 2008) the step sum reaching high of 234 with 1675 UP & 1441 DOWN and Nifty closing at 5049 ;  a key observation   higher Step Sum topped out  with out a higher value in Nifty  but  starting a correction  ;

8)           On 3244th day (27 Oct 2008) the step sum went down to 214 as a result of 1729 UP & 1545 DOWN & Nifty closing at 2524  with Significant Low (2253) ;

9)           On 3302nd day (23 Jan 2009), the step sum went down to 212 with 1757 UP & 1545 DOWN  & Nifty closing at 2679  ;

10)         On 3743th day (05 Nov 2010)  the  step sum went up to 265 following 2004 UP & 1739 DOWN  & Nifty closing at 6312 while the Significant High 6338 reached ;

11)         On 4020th day (20 Dec 2011) the step sum went down to 230 following 2125 UP & 1895 DOWN & Nifty closing at 4544 with the Significant Low  4531 reached ;

12)         On 4818th Day (04 Mar 2015) the step sum went up to 314 following 2566 UP & 2252 DOWN & Nifty closing at 8923  while the Significant High 9119 reached ;

13)         On 5063rd Day (29 Feb 2016)  the step sum went down to 289 following 2676 UP & 2387 DOWN & Nifty closing at 6987 with the Significant Low  6826  reached

 


14)         On 6019th Day (20 Jan 2020)  the step sum went up to 379 following 3199 UP & 2818 DOWN & Nifty closing at 12225  while the Significant High  12430 reached ;

13)         On 6064th Day (24 Mar 2020)   the step sum went down to 366 following 3215 UP & 2849 DOWN & Nifty closing at 7801 with the Significant Low  7511  reached ;

14)         On  6454th Day (19 Oct 2021)  the step sum went up to  458 following 3456 UP & 2998 DOWN & Nifty closing at 18419  while the Significant High  18604 reached ;

15)         On 6619 th Day (17 Jun 2022)  the step sum went down to 429 following 3524 UP & 3095 DOWN & Nifty closing at 15293  with the Significant Low  15183  reached ; and

16)         On 6700th Day (14 Oct 2022) the step sum went up to 440 following  3570 UP & 3130 DOWN and the Nifty closing at 17186.

Derived Conclusive Points :  The Step Sum is ALWAYS a function of closing value of the INDEX irrespective of the Nifty  High or Low value. However, the Significant Low/High  in the Step Sum  are co-related with the  Nifty  High or Low value  (often around  historically significant values).

 TABLE (with all DATA)

 

Date N I F T Y   Step UP Step DOWN
High Low Close StepSum Index No_UP Index N0_DOWN
      1000 0



04-Dec-96 806 775 788 -35 1434 119 1646 -154
23-Feb-00 1818 1689 1696 3 7748 538 7051 -535
09-Feb-01 1416 1396 1406 24 10019 669 9614 -645
21-Sep-01 904 850 854 -2 10831 733 10977 -735
02-Aug-02 958 936 955 -4 11950 840 11995 -844
12-Aug-02 972 961 970 0 11981 845 12011 -845
30-Oct-02 944 936 938 0 12128 871 12190 -871
02-Dec-04 2002 1963 1999 100 16873 1185 15874 -1085
31-Jan-06 3005 2969 3001 137 20260 1349 18259 -1212
04-Dec-06 4015 3992 4001 187 24904 1480 21903 -1293
27-Sep-07 5016 4943 5001 222 29823 1599 25822 -1377
11-Dec-07 6111 5960 6097 222 32569 1625 27472 -1403
08-Jan-08 6357 6222 6288 228 33179 1637 27891 -1409
22-Apr-08 5074 4994 5049 234 36190 1675 32141 -1441
27-Oct-08 2585 2253 2524 214 40162 1729 38637 -1515
23-Jan-09 2766 2662 2679 212 42373 1757 40695 -1545
05-Nov-10 6339 6303 6312 265 55232 2004 49919 -1739
20-Dec-11 4637 4531 4544 230 62082 2125 58538 -1895
30-Dec-11 4690 4609 4624 228 62337 2128 58713 -1900
03-Mar-15 9008 8926 8996 315 82369 2566 74373 -2251
04-Mar-15 9119 8894 8923 314 82369 2566 74447 -2252
11-Feb-16 7209 6960 6976 287 88853 2669 82877 -2382
29-Feb-16 7095 6826 6987 289 89285 2676 83298 -2387
16-Jan-20 12389 12316 12356 381 120312 3199 108957 -2818
20-Jan-20 12431 12217 12225 379 120312 3199 109088 -2820
23-Mar-20 8159 7584 7610 365 122349 3214 115739 -2849
24-Mar-20 8037 7511 7801 366 122540 3215 115739 -2849
18-Oct-21 18543 18445 18477 459 149708 3456 132231 -2997
19-Oct-21 18604 18378 18419 458 149708 3456 132289 -2998
17-Jun-22 15400 15183 15294 429 161706 3524 147413 -3095
14-Oct-22 17349 17170 17186 440 167728 3570 151542 -3130