A key indicator has been the market staying below its 200-day moving average and forming successive lower tops and lower bottoms.
In the three bear markets of the last 20 peak, Indian benchmarks have already fallen close to 40% from their record highs seen in January this year. But the moot question here, according to Morgan Stanly, is how long this bear phase will last, and not how much further prices are going to fall.
Macro fundamentals could take 18 month to bottom out. Based on this, the bear market may have another 25-50 weeks to go, the pace of fall in stock prices will decline going forward.
“The markets will likely bounce back as it does in bear markets the trigger this time around could be a sanguine earnings season, benign action from the RBI and weak sentiment,” the report said. But the brokerage maintains that it will use the opportunity to book profits.
Tuesday, July 15, 2008
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