The market has seen many ups and downs but this time the recession is less graceful to us.
According to the reports, the stock market could go into recession and Nifty may touch 6,500 in the next 6 months.
But as we look forward to the parameters, the data depicts that the economy could enter into a depression period. This means that GDP could turn into negative territory, meaning it could godown anywhere between -1% to -5%.
Although, the reports do share the fact that the period could be quite long in comparison to slow own time. It may be 2 years or more and in this period, Nifty is likely to touch 5,500 and the stocks are likely to be available at 10-50%. And this availability depends upon small cap-large discounts present from their peak.
Adding to this, one good reason for the recession period is the pandemic outbreak of the
Coronavirus. However, the increase in the crude oil barrel prices which saw an enormous
increase is likely to touch $12-$15 per barrel. And this might give backfire to the US-China
Trade War. This can be a major setback for major economies and could result in minor
depression.
The depression could extend to 15 percent to 20 percent as well, provided by other multiple economies. And in the midst of major drop, new emerging economic growth on the globe could achieve positive results. So, it is advised to be cautious and measurable. Try to keep more patience and be ready to invest in lower levels.
As we look into the Nifty trends for the last three years, the numbers are taking a turn and the bulls need serious attention at this stage. And the depiction of the long-term benefits from the charts showcases the current situation of the bulls. They are intensely damaged and under it, many sectors have developed weak technical set-processes.
Automobile, bank and financial service providers are coming forward to contribute in this Nifty fall. These weak points can result in cause breakage and could contribute to it. Thus, the final verdict could be that this fall will be continued for the next few months and the bears will exercise a favorable response. And as for the traders, the current situation is more deprived than the 2008 Market crash.
Following are the points which should be kept in mind of both existing and new market
shareholders:
1. Monthly RSI registered a low of 36.40 in the year 2008 whereas in the past falling period, the lifetime low of 30.3. This clearly indicates that the momentum of fall is much higher than in 2008.
2. The fall of 2008 was accompanied by periodic pull-back. But this time, the recent fall has registered three consecutive red candles on monthly charts with no sustainable pull-back.
3. Long-term rising trend line breakdown originating from the lows of 2008 direct towards more weakness in the upcoming week.
Additionally, the prices are trading below 20 months moving average for the first time after 2016.
Observing conditions like these after the medium-term support levels, the bears will be going strong for the next few months and Nifty50 will continue to sell on a high base.
As of now, you can see that we are heading towards the level of 6,825 and 6,280. And the
available medium-term resistance is placed at 10,100. This means that any rise in price, until this level of the highly oversold zone, should be taken as a raw and new selling opportunity to traders.
