How to categorize trends?In times like these when markets are moving down so much from the high point, it is important to understand this chart.
In a Bull market, the market consistently makes higher highs and higher lows. When the market starts moving lower, people start fearing an incoming bear market or a crash. But it is important to note that, if the market is down <10% from all time high, it is not enough to be considered a correction.
A correction is when the market is trading between 10% and 20% lower from the all time high. Currently Nifty 50 is only down 7.5% from the high point. Hence, it cannot really be termed as a correction yet either.
A bear market is defined when the prices are trading more than 20% from the all time high. This point is very very far away for Nifty and it would have to go down below 12,350 for it to be considered a bear market.
In my opinion, if one is a long term investor, all dips on the market are good opportunities to start buying more shares. It is not possible for any one predict and buy right at the bottom of the dip. Hence, I consider the current market situation to as a time to accumulate small quantities of stocks which you can keep adding to if the market dips further.
