Bear Market Rally Vs Bull Market

Bear Market Rally

I was doing some research about the historical data of Nifty and Sensex and I have seen something interesting. In the history of last 4 decades we have seen almost you can say 14 Bear Markets. In each bear Market there was a sharp V Shaped recovery and that V Shaped recovery is similar to the current Bear Market V Shaped recovery.

Bull Market

Again the above data I used to see if there is something different from the previous rally and I found one thing which is Volumes. All previous bear market rally had always been a low volume and there is definitely a reason behind it. The people feel tired looking at the market which never goes up and then tend to move out of the market and does not look at the portfolios. This means low participation for a very elongated period of time and this low participation drive the recovery and as the interest of people come again the next leg of downside comes in.

Conclusion

Current Rally is a bear market rally based on pattern but a bull market when you look at volumes. So now it’s your call to decide what it could be. No marks for guessing because you may now know that I am an all time bullish on Indian Equity market.