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Is “sell in May and go away” relevant for Indian markets? Here’s a look at NIFTY50 historical trends
3 min read | Updated on May 06, 2025, 09:07 IST
SUMMARY
The "Sell in May and go away" adage suggests selling stocks in May to avoid seasonal underperformance, but analysis of the NIFTY50 over the past decade tells a different story altogether. Let's examine historical performance, recent chart trends, and upcoming economic events that may influence May 2025 market movements.
The NIFTY50 has shown positive performance in May in 6 of the last 10 years.
The stock market adage “Sell in May and go away” suggests investors sell stocks in May and re-enter in November to avoid seasonal underperformance. Historically, in the UK and US, this period was characterised by lower trading volumes, slower business growth, delayed September earnings (reported mid-October) and spring dividend payouts prompting selling pressure in May. However, globalisation and modern trading techniques have reduced the relevance of this adage in recent times.
NIFTY50 performance from March to May (2015 - 2025)
| Year | March | April | May | April MoM (%) | May MoM (%) |
|---|---|---|---|---|---|
| 2015 | 8,491 | 8,182 | 8,434 | -3.6% | 3.1% |
| 2016 | 7,738 | 7,850 | 8,160 | 1.4% | 3.9% |
| 2017 | 9,174 | 9,304 | 9,621 | 1.4% | 3.4% |
| 2018 | 10,114 | 10,739 | 10,736 | 6.2% | 0.0% |
| 2019 | 11,624 | 11,748 | 11,923 | 1.1% | 1.5% |
| 2020 | 8,598 | 9,860 | 9,580 | 14.7% | -2.8% |
| 2021 | 14,691 | 14,631 | 15,583 | -0.4% | 6.5% |
| 2022 | 17,465 | 17,103 | 16,585 | -2.1% | -3.0% |
| 2023 | 17,360 | 18,065 | 18,534 | 4.1% | 2.6% |
| 2024 | 22,327 | 22,605 | 22,531 | 1.2% | -0.3% |
| 2025 | 23,550 | 24,334 | ? | 3.3% | ? |
NIFTY50 defied the adage in the last 10 years
The NIFTY50 has shown positive performance in May in 6 of the last 10 years. Of the remaining 4 years, 2 years saw flat returns, while only 2 saw negative returns, indicating the “Sell in may and go away” adage did not hold true for Indian markets. However, when April posts strong gains, May tends to underperform.
What’s the recent Nifty50 chart saying?
On the weekly time frame, up until the first week of April, the Nifty50 had followed a lower-top, lower-bottom pattern. However, it reversed and breached this pattern mid-April, surging above the previous swing high of 23,870. This move was supported by a positive divergence in the Relative Strength Index (RSI), where the RSI achieved a higher low, while the price still maintained the lower-low pattern.
Just recently, the NIFTY50 reversed course from near 24,550 levels and experienced some profit booking. This level is the 61.8% retracement of the down move from its all-time high (ATH) to its April low. Therefore, 24,550 will act as a crucial level for the NIFTY50.
Economic calendar
Finally, here are a few upcoming events that could influence the movement of Indian stock markets in May 2025.
| Date | Event | Importance |
|---|---|---|
| May 6 | HSBC Services PMI for April | * |
| May 12 | Inflation rate YoY for April | *** |
| May 14 | WPI Inflation YoY for April | ** |
| May 30 | GDP Growth rate YoY for Q1 | *** |
In conclusion, the NIFTY50’s history shows that the adage “Sell in May and go away” is irrelevant in the Indian context, though strong April rises signal weaker May returns. This aligns with recent technical indicators, as the index broke its bearish trend in mid-April but now tests a resistance at 24,550. Thus, the NIFTY50 signals cautious optimism for now, with the inflation and GDP data in May 2025 also influencing its trajectory.
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