Bull fatigue or bear charge
Indian equities have witnessed a decent correction in the past five months. The correction has been regular, deep and broad. As per the historical trends, in a regular market correction, the broader markets usually correct 1.5x to 2.5x relative to the benchmark indices. This trend seems to be sustaining in the ongoing correction also. It is debatable how long and deep this correction would eventually be, there should be no doubt that the markets will find a floor and commence a fresh up move. To estimate a bottom, we need to first assume whether the current correction is a usual bull cycle pull back or a bear market cycle. · In case of bull market corrections, Nifty50 usually corrects between 8%-15%, and fully retraces the lost ground in a maximum of 26 weeks from logging the bottom. In a complete bull market, the bottoms made during the intermittent corrections could be tested several times. · ...