February 10, 2016

NIFTY in bear market?

Popular accepted definition of a bear market is when the major indices lose more than 20% off their highs.

NIFTY has lost 20% from its all time high of 9120 spot.

So going by this logic, NF has officially entered bear market territory. Or it hasn't?

I have a slightly different view on this. I like to look at the intensity of the correction and how fast it has happened. Typically after a euphoric bull run, the 20% drop should ideally happen within 1-2 months and not after 1-2 years.

Our weekly charts show a channeled down move - any channeled move is usually a corrective to the previous move. By this logic, as long as NF trades within the falling channel, it is fine.

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