InvestorQ : is the mkt positioned itself for a correction of nifty going towards Nifty at 9100 levels
SANJAY Chheda made post

is the mkt positioned itself for a correction of nifty going towards Nifty at 9100 levels

Answer
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Abigail Ghoshal answered.
1 year ago


Nifty has already corrected from a peak of 12,000 on budget day to a level of 10,900 over the last 45 days. That is a correction of nearly 10%. When you talk of a Nifty level of 9100 you are referring to a total correction of 25% from the peak which is a full-fledged bear market from a stock market perspective. Will, the market get to that level?

Markets have never been easy to predict and technical levels have their own limitations. But let me tell you the likely conditions wherein such a scenario is possible. A correction to 9100 is possible if profits for 2020 would end up showing negative growth. While growth will be lower than expected, negative growth looks unlikely.

If there is a major global crisis like a sharp rise in the dollar or a sharp rise in the price of oil or if the Chinese economy really flattens. Neither of these options appears to be likely at this point in time.

For the Nifty to go to 9100, you need sharp corrections in heavyweights like RIL, HDFC Bank, HDFC, Hindustan Unilever, ICICI Bank, etc. While slowing consumption is an issue, the situation is far from being so scary. In short, there are concerns in terms of slowing auto sales, consumption worries, etc. However, most global central banks are reconciled to once again infuse liquidity into the system including the RBI. Such concerns may be largely overdone.