Is this a bear market or opportunity to Buy?
Bear markets take for e.g. 2008 or even flash crash of 2020 had a clear faster retracement which is not present as of now at least. On the contrary we have been consolidating for the past 8 months now in a broad trading range between 18500-15500 broadly speaking.
Bear market falls are in lesser time with faster retracements
However we can see from the charts above that the rise is much faster while the fall is in the form of a corrective wave. In simple words fall is taking much longer time vs the rise and this is called a corrective fragmented fall.
Bear markets take for e.g. 2008 or even flash crash of 2020 had a clear faster retracement which is not present as of now atleast. On the contrary we have been consolidating for the past 8 months now in a broad trading range between 18500-15500 broadly speaking.
Earnings beating estimates and earnings upgrades in all our portfolio stocks
Another characteristic of a bear market is that earnings miss estimates however on the contrary all our stocks have seen earnings upgrades. So for e.g. one of the private sector banks that we are holding has posted best ever results in its history of operations, another bank that we own in our portfolio has given almost a 100% rise in net profits YoY. A software company we own has grown PAT (profits) by 130% or for that matter a turn around story stock that we own has posted a profit of 10Cr vs a loss last year with capacity utilization doubling.
The point is the list goes on and on where multiple positives are showing up in the earnings. This is not a characteristic of a bear market.
Buying selectively will make superb money. Broad market may not.
Buy selected stocks where growth remains intact. Outlook and earnings upgrades are in place and be sure to avoid manufacturing for the time being or anything to do with input cost pressures for now.
As usual if you are only trading/investing on the basis of this post please use your own risk management and then only trade/invest. Please do not over trade and always keep your risk in check.
Good trading and investing to you.
Regards,
Glen Drago
Sub-Broker IIFL,Smallcase