Can an astronomical event really affect the stock market?
Most people have a skeptical or cynical opinion when asked such a question.
In this post, let us see if these events really provide any help in detecting stock movements or whether they are just idle talk.
Firstly, let us examine the lunar phases and try to relate them to the various stock market movements.
There are eight main phases of moon as explained in the image below:
To keep it simple, out of these eight phases, let us only use the full moon and new moon for our study.
Before explaining anything, let us take a few examples with charts. Below are the charts marked with the full moon and new moon days. The full moon days are visually represented by the yellow circle with the yellow vertical line. Alternatively, new moon days are represented by the grey circle with the grey vertical line.
1. Nifty Futures
2. Reliance Capital
Examine the charts above carefully. There are many instances where either a full moon or a new moon day has led to the following:
1. The reversal of an ongoing trend
2. A trigger of a new wave of an ongoing trend
3. The start of a sideways action
So, from the above examples, it can be generalized that these lunar phases can act as a timing device for the trigger of our trades. Using price action based strategies, with this timing device, can skew the chance of profitability in a more favorable manner.
PS: Full moons or new moons falling on the weekend, can be used as a turning point on Mondays.