➡️Bull market: A market condition where the price of a share is expected to rise, encouraging buying.
✨How to know if the market is bullish?
1⃣Check the nature of the rally.
🔹Find out if the rally is broad in nature or sector-specific.
🔹The outperformance of one sector over the other doesn't guarantee the start of a bull market.
🔹Analyze the market's broad-based rally.
2⃣Check the volatility Index (VIX) or Fear Index (FI)
🔹VIX indicates the fluctuation of the market.
🔹High VIX shows that fear in the investors has increased.
🔹If the VIX is below 20, it is safe for investment: A bullish condition.
3⃣Check the M-cap to GDP ratio.
🔹This helps identify if the market has bottomed out or not.
🔹An M-cap to GDP ratio above 1 shows that the market is getting bullish.
4⃣Check the daily moving average
🔹In a bulls market, the stock value & its index will be above its 200 DMA.
🔹Low impact cost & higher trading volumes are also indications of a bull market.
✨Things to be mindful of in a bull market.
➡️Bull markets arise from excesses of bear markets & vice-versa.
➡️The bear market usually lasts in the 18-24 months of the market.
➡️If a stock sustains its high, then its economy is bound to rise, showing the start of a bull market.
✨One could take advantage of the bull market by :
➡️Identifying stocks with strong fundamentals.
➡️By analyzing the volume & patterns of the chart.
➡️By making a call to invest at the right time.
🔹The quarterly results of most companies have been impacted by the current scenario.
🔹In the short term, the market will be very volatile.
🔹In the long term, the market will be bullish.
🔹Our expert screens his stock both fundamentally & technically.
🔹Here are some factors to check out before choosing a stock:
🔸Return on capital of the company: > 15-20%
🔸Return on equity of the company: > 15-20%
🔸The debt of the company should be </= 0.4
🔹The government plans to promote renewable energy.
🔹#TATAPOWER aims to double its renewable energy generating capacity by 2025.
🔹Power demand will increase with the rise of EV.
@sanchittasksali highlighted the probable reasons for the fall.
🔸The fear of Omicron.
➡️The situation in the UK is feeble; a lockdown may be expected soon.
🔸The RBI policy has sucked up the liquidity.
➡️This will impact the cost of borrowing for the market participants
➡️The issue of IPO funding has also become a trigger for the fall.
➡️People have started selling stocks to cover their losses.
➡️It will take some more time for the market to find a bottom.