Not all sectors in the stock market act the same way. Some move in the same direction as the larger indices. Other sectors have their own rhythm. They are quiet for months, then suddenly active, with a sharp trend for a short time before going quiet again. These are cyclical pockets where timing is everything, not just important.
One example is the Dyes and Pigments area of the larger Chemical sector. It doesn’t always get a lot of attention. It doesn’t follow the Nifty every week. But in the past, it has followed a clear seasonal pattern. It tends to get weaker at the beginning of the year and then get stronger from March on.
For traders who pay attention to seasonality and chart structure, February is often a month of getting ready instead of panicking.
Understanding Seasonality Analysis for Statistical Edge
When doing Seasonality Analysis, we look at how prices have changed in the past during certain months or times of the year. We look at whether a stock or sector tends to go up or down at the same time each month. Traders can find patterns that happen over and over again by looking at average monthly returns over a number of years.
Seasonality doesn’t guarantee how things will go in the future, but it does give you a statistical edge. When used with technical analysis, it helps traders time their entries and exits to match historically good time windows.
Let’s head to the two smallcap stocks from the sector.
1. Kiri Industries: A ‘Golden Cross’ Recovery Play
The seasonality data tells a story all by itself, even before you look at the charts.
Kiri Industries has seen an average drop of 8.94% in January and 4.88% in February since 2015. That is not a small dip; it shows that things have been weak at the start of the year.
But what comes next is interesting.
The average monthly returns go from negative to positive between March and July. They range from 0.39% to 11.96%. There is an opportunity in this change from weak to strong.
Historically, the January–February correction makes people more negative, but the historical trends suggest that the mood starts to change in March.
Kiri Indus Weekly Chart
In a technical sense, the weekly chart backs up this story.
- The stock has gone above its 2023 high and is now testing that breakout zone again in 2026.
- It is trading in a larger golden cross structure, which is a bullish sign because the long-term moving average has crossed above the shorter-term average.
- The price is making a base near the 200-week EMA, which is a level that institutions often use as support.
When seasonality weakness lines up with long-term support, it makes for a good risk-reward setup.
This isn’t a chase trade for bulls. As long as the structure stays the same, it is a patient accumulation zone.
The plan is simple to keep an eye on the dip in February, wait for prices to stabilise, and then ride the seasonal rise into the March to May window.
2. Vidhi Speciality: Riding a Multi-Year Technical Breakout
Vidhi Specialty Food Ingredients has a seasonal pattern that is similar but a little different.
In the past, January and February have had average returns of -4.78% and -3.38%, respectively. Again, things are slow at the beginning of the year. But starting in March, things start to pick up quickly.
In March alone, the average return was 7.7%. The positive bias lasted until September, when it averaged about 5.97%.
May sometimes show some weakness, but the overall tactical trade stays the same. Buy when the market is weak in February and sell when momentum starts to fade in May.
VIDHIING Weekly Chart
The technical structure is also very interesting.
- The stock is close to the 2023 low, which is an important support level. These kinds of historical supports are often decision zones, where there are either strong rebounds or structural breakdowns.
- The RSI on the weekly chart is moving up from the oversold 30 zone. An RSI reversal from oversold territory is a sign that the selling pressure is running out.
When this happens at the same time as historical support and good seasonality, the chances are higher that it will bounce back than that it will break down.
But discipline is very important. If the price doesn’t stay above support and the momentum turns negative again, the seasonal theory must be thrown out. The charts must back up the story.
Timing Over Emotion
Traders need to be mature in cyclical sectors. You can’t just buy these ideas and forget about them. They are tactical moves.
The Dyes and Pigments space may not move in the same way as the larger indices. In fact, it might not do well for most of the year. But during its seasonal window, which lasts about three to four months, it can give you real alpha.
The most important thing to remember is not to buy blindly in February. It’s about:
- Finding out what is weak in each season
- Waiting for technical proof
- Entering with a clear risk
- Exiting without getting too attached by May if the momentum slows down.
- Markets reward being ready, not guessing.
Kiri Industries and Vidhi Speciality Food Ingredients should be on the February watchlist for traders who are willing to follow the rules of seasonality and charting. Timing is the key to success in cyclical sectors.
Disclaimer:
Note: The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only.
Brijesh Bhatia is an Independent Research Analyst and is engaged in offering research and recommendation services with SEBI RA Number – INH000022075. He has two decades of experience in India’s financial markets as a trader and technical analyst.
Disclosure: The writer and his dependents do not hold the stocks discussed here.
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