Q&A_ Is Nifty heading for a bear market?Namaste!
I have been tracking DJI (Dow Jones Industrial Average) for quite a while. The bear market is defined as 20% correction in benchmark indices from the all time highs.
SPX (S&P 500) has fell into bear market twice (2nd after retracement), it closed below 20% line on daily as well as weekly candles . But it did recovered from those levels until recently, it closed again, it is in a bear market now .
However, Dow Jones hasn't closed below 20% levels at the above mentioned period. This time, it has closed below 20% level on daily candle.
I will be 100% sure of a bear market if DJI closes below on Weekly candles.
If DJI fall into a bear market, there is a very highest probability our Nifty 50 will to. It can take Nifty to 14600 levels.
How to plan this bear market?
1. For people already invested:
Don't sell your current holdings to buy at cheap. It will be a add more opportunity. You can consider either investing 50% of remaining investing amount now, 50% at Nifty 15100 or 14600 levels or whole remaining capital at 15100 levels.
2. For people waiting for investment:
I would advice to invest 30% of the capital now and remaining 70% at Nifty 15100 or 14600 levels. These levels are drawn assuming Nifty will create the last swing low at 15100 level, and 14600 level is a psychological and a 20% level.
Will all the stocks in Nifty 50 fall at the same speed?
A: Nope. Overvalued blue-chip / large-cap stocks will fall more than those of (undervalued) fundamentally strong.
Mid cap and small cap will fall at greater speed after taking above points into consideration. So if you hold small and mid-cap, get ready to stomach more downside. BUT DO NOT SELL. . Warren Buffett doesn't sell and other notable investors I know advice the same.
Disclaimer: The analysis I have shared is based on my understanding and experience in the markets. This article must be assumed as a opinion only not a trading/investing call. Please do your analysis and/or consult your financial advisor before investing.
