Bye bye bear
Can we say that the bottom formation has taken place in the stock market?
As far as I'm concern I still feel not yet.
Going by the history its too early to say the bottom, yet I feel 12500 seems to be a very important support which has been held in the present carnage of the market. So market in a short term has definitely seen a bottom, but it has still to go more which makes me feel that the pain is not yet over.
Levels of 10000 to 8800 on Sensex can be possible in medium to intermediate term.
Reasons for it:
When does a Bear market end's?
1. When there is a great deal of fear, cash with funds is at record levels?
2. Has retail investors developed an easy new game - shorting?
3. Has the main line media have finally discovered that we are in a bear market and are they repeatedly and extensively covering it?
If the answer to the above comes to you as YES then definitely we can say we are out of the bear market. But unfortunately I am getting these answers as NO.
Some previous bear hugs:
Boom bust of 1991-93
[img=http://img228.imageshack.us/img228/9356/sensex1992yv9.th.gif]
From the peak of 4546 in early April 1992, went down to 1980, in april 1993.
The market there after went under consolidation phase and only after nov 98 the market once again rallied from 2742 to reach 6150 in mar 2000 and then Dot Com bubble bursts and the sensex dropped to hit a low of 2596. This bear swipe took 58% off the peak and lasted for almost 20 months.
[img=http://img228.imageshack.us/img228/9135/sensex2001fw0.th.gif]
Real Estate bust, this time the market has hit the peak of 21207 in jan 2008 and rest is yet to follow. No body knows what is hidden in the future? Will this double bottom formation marks the end of this bear phase or not? History suggests NO. It is not necessary that indices will go down again to make fresh lows and will take longer time to go on a fresh uptrend, but I feel it pays off well to remember history in time like these. As future is nothing but replica of past.
[img=http://img228.imageshack.us/img228/1695/sensex2008hj2.th.gif]
Yellow and purple lines are optimistic moves if 12500 level holds and no fresh bad news comes in then such a possibility can takes place in such situation.
Can we say that the bottom formation has taken place in the stock market?
As far as I'm concern I still feel not yet.
Going by the history its too early to say the bottom, yet I feel 12500 seems to be a very important support which has been held in the present carnage of the market. So market in a short term has definitely seen a bottom, but it has still to go more which makes me feel that the pain is not yet over.
Levels of 10000 to 8800 on Sensex can be possible in medium to intermediate term.
Reasons for it:
When does a Bear market end's?
1. When there is a great deal of fear, cash with funds is at record levels?
2. Has retail investors developed an easy new game - shorting?
3. Has the main line media have finally discovered that we are in a bear market and are they repeatedly and extensively covering it?
If the answer to the above comes to you as YES then definitely we can say we are out of the bear market. But unfortunately I am getting these answers as NO.
Some previous bear hugs:
Boom bust of 1991-93
[img=http://img228.imageshack.us/img228/9356/sensex1992yv9.th.gif]
From the peak of 4546 in early April 1992, went down to 1980, in april 1993.
The market there after went under consolidation phase and only after nov 98 the market once again rallied from 2742 to reach 6150 in mar 2000 and then Dot Com bubble bursts and the sensex dropped to hit a low of 2596. This bear swipe took 58% off the peak and lasted for almost 20 months.
[img=http://img228.imageshack.us/img228/9135/sensex2001fw0.th.gif]
Real Estate bust, this time the market has hit the peak of 21207 in jan 2008 and rest is yet to follow. No body knows what is hidden in the future? Will this double bottom formation marks the end of this bear phase or not? History suggests NO. It is not necessary that indices will go down again to make fresh lows and will take longer time to go on a fresh uptrend, but I feel it pays off well to remember history in time like these. As future is nothing but replica of past.
[img=http://img228.imageshack.us/img228/1695/sensex2008hj2.th.gif]
Yellow and purple lines are optimistic moves if 12500 level holds and no fresh bad news comes in then such a possibility can takes place in such situation.
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