Meaning of Bull and Bear Trend:
Cycle of Bull and Bear Market:
All financial markets are cyclical in nature. A combination of bull run and bear phase makes a full cycle. Consumable agricultural commodities mostly have a cycle of one year. Non-agricultural commodities like gold, silver, crude oil etc. have much longer cycle. Gold was in bear phase from 1980 to 1999. In developing economies like India the stock markets have a cycle of approximately 5 to 7 years. A full bull and bear market completes in this period of 5 to 7 years.
Intensity of Bull and Bear Trend:
In a stock market, a bull or bear trend can be for the majority of the market or for some selected stocks. For example, our Share Bazaar was in a bull trend from April 2003 to January 2008. Our index SENSEX rose from 3000 to 21000 in this period along with NIFTY which climbed from 1000 to 6300. This was a overall bull market.
In October 2008 Nifty made a low of 2253 and then Nifty again rose to 6300 in November 2010. But this time the rally was in Auto, FMCG, Banks, and Pharmaceutical stocks. Other sectors of the market like Capital Goods, Infrastructure, Petroleum, Telecom, and Power stocks were not participating in this bull market. After some time, many stocks in these sectors, which didn’t participated in the rally were even making multi year lows.
Primary and Secondary Market Trends:
A long bull market has short bear markets in it and a long bear market has short bull markets in it. If a market is in bull trend it is the primary trend of the market and that will last for some years, but there will be bear trends within this primary trend and these secondary trends will last for some days, weeks or months. So it is very difficult for an investor to decide where a bull market has made its top and where a bear market has made its bottom.
Change of Trend:
When there is darkest hour, when the economy is in worst shape, when every body has a fear of loosing job, when results of companies are at bottom, this is the period of the end of a bear market. And when economy is at boom, when every body is optimistic about future, when the results of companies are at top this is near the end of a bull market.
Stocks in Bull or Bear Market:
As already told all financial markets move in a cycle. All stocks have their different cycles. A midcap or small cap stock may have a cycle of 1 to 3 years. A large cap stock usually has a bigger cycle. It can be larger than the cycle of the index.
How to Identify the Bull Trend:
After completing its bear market, when a stock start rising, it usually becomes double from its lows and consolidates there for some weeks or months. It can be a bear market rally. This stock may resume its downtrend and give new lows.
But if it further rises and become more than double and start outperforming the index or stocks of its sector. It is the starting of a bull market. This bull trend may convert into medium to long term bull trend. In a long term bull trend a stock can become 20 times from its lows.
The Bear Trend:
The stock will have the opposite behavior if it in bear trend. An investor should remain very careful before putting his money in a cheap stock. It may be a wrong decision. A stock was at 1000 and now it is at 500 can not be the criteria for choosing a stock. It can further fall to 100 or even 50.
List of Stocks in Bull and Bear Trend:
Here is a list of stocks which are in medium to long term bull or bear market. Every week a new stock is added in this list:
February 15, 2014
February 8, 2014
February 1, 2014
January 25, 2014
January 18, 2014
February 15, 2014
ITC, the FMCG giant, started its long term bull market in 2004 and made a life high (adjusted after split and bonus) of 120 on January 8, 2008 while at the same time the Nifty was making 6357 as its life high.
After that in the market crash of October 2008, when Nifty made a low of 2300 the ITC came down to 66. In November 2010, when the Nifty again touched its high of 6350, the ITC made a new life high of 180 as a long term Bull Run stock.
The ITC made a life high of 380 on July 24, 2013, while Nifty was struggling to do so. After that the stock is in correction and consolidation. The stock is near support levels. In the coming uncertain election times the stocks with sound earnings will be in focus.
We can see that a stock is in a long term bull market from more than 10 years and still moving up. In coming times we should be able to see new highs in this stock.
February 8, 2014
IDEA listed on stock exchanges on March 9, 2007 at Rs. 85 and made a high of 161 on October 18, 2007 in the historic Bull Run. After that in the bear phase of 2008 it made a life low of 34 on October 27, 2008.
After the consolidation of 4 years IDEA started its new bull market in January 2013 and made a new life high of 188 on October 15, 2013. With this it has tested the long term bull market. After that it is correcting from its life highs and is near 140.
After making new life highs this is the first correction for the stock. 130-140 zone looks like good support area for the stock and investors looking for long term bull market stocks can accumulate this stock.
UNIONBANK is a PSU bank and made its all time high of 427 on October 27, 2010 along with BANKNIFTY which made a high of 13300 at that time. UNIONBANK had completed its long term bull market in March 2011 and entered into a bear market.
In May 2013, when BANKNIFTY made a new high of 13400, the UNIONBANK was at 250. The BANKNIFTY went down to 8400 in August 2013 the stock touched a low of 97 and took a support near its 2008 lows.
Now recently, in December 2014 when BANKNIFTY touched a high of 12200 this stock was unable to cross 140 levels. The Nifty touched a new life high of 6415 in December 2013 and is 5 percent low from that high. The BANKNIFTY is 16 percent low from its recent high whereas the UNIONBANK is 28 percent low from December high and is near its August 2013 lows.
In coming times I am expecting that this stock should break the lows of 2008 very soon and we may be able to see the levels of 75 in this stock.
January 25, 2014
M&MFIN listed on stock exchanges on March 17, 2006 at Rs. 46 (after adjusting bonus and splits). It entered in a long term bull market in January 2010. The stock had made its all time high of 356 on December 23, 2013. After that it is in a corrective phase and recently made a low of 232 on January 23, 2014.
Now, M&MFIN is near its support. It has a good support around 220 to 240 range. The stock can give an immediate bounce back which can take it to 270-280 levels. Investors looking for long term bull market stocks can also buy this stock with a target of 330 or more in coming months.
Dabur India entered into long term bull market in January 2005, when the stock price (adjusted after split and bonus) was nearly Rs. 16. It made a high of 67 in November 2007 when the indices were making new highs.
In the fall of 2008 when Nifty fell from 6300 to 2300, Dabur made a low of 30 in October 2008. The stock was falling less than the index. It means there was strength in it and it was a signal of long term bull trend. As a result it has made its all time high of 184 on October 28, 2013.
After that it is in corrective phase and it is near 165. The stock is still in long term bull market and we will see new highs in this stock. It has a good support around 150-155 and upward target should be 195-200 for the stock in coming months.
January 11, 2014
RCOM listed on stock exchanges on March 6, 2006 at 291 after scheme of arrangement of demerger from Reliance Industries. It made an all time high of 845 on January 10, 2008 and a life low of 46.50 on August 30, 2012.
After that it starts its short to medium term bull trend and made a high of 164.50 on September 20, 2013. Now you can see a clear distribution in RCOM which looks like a hurdle for the stock in entering the long term bull market.
RCOM has an immediate support around 115 levels and resistance at 130-135 levels. We may be able to see RCOM around 85 levels by the end of March 2014.
January 4, 2014
January 4, 2014
Wipro had made its all time high of 1150 (adjusted after split and bonus) on February 22, 2000 in dot com bubble. After that it had made a low of 88 on May 26, 2003. On January 19, 2010 Wipro made a high of 504.
Now on October 14, 2013 Wipro crossed the level of 504 after almost 4 years. If you remember I have told you about this in weekly review. After touching 519 it went back to 468 in November. Now Wipro is at 564 and entered a long term bull market.
504 is the breakout level and when ever you find it near this level it will be an investment buy and in coming months Wipro should go near its all time high levels of 1150. IT index is also supporting. As the result season is starting any bad result or bad news will be a buying opportunity in this stock.