Dears readers, we are now into December, the last month of the trading year. It is this month where typically some funds close off their positions and go off for their holidays and prepare for a new trading year ahead. For the month of December, I think investors are generally looking at whether there will be a Santa Claus rally for stocks.
A Santa Claus rally is defined as a calender effect that involves a rise in stock prices during the last five trading days in December and the first two trading days in the following January. For December 2019, there was a slight rise in the Straits Times Index over the period of the Santa Claus rally. For this year, will investors similarly experience a Santa Claus rally for stocks?
Currently, the Straits Times Index (STI) is at 2,839.89 and the STI has really come a long way in gaining the rally to the current level. Unless there is some very positive developments (what I could think of is those related to Covid-19 vaccine developments), hence I think gains for the STI are expected to be rather limited.
Instead of a Santa Claus rally, I believe some investors had already enjoyed the rally by investing at the lows of the STI during this year though it has been really a volatile year equities!
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