Bear Market 2000-2002: Replay in 2008
As you can see in the chart above, the 2000-2002 bear market was not only painful in terms of price correction but also time correction. Here are some facts -
-
Nifty peaked in Feb 2000
-
It then took 8 months for the market to slide to 200 week moving average. The price correction was 36% and it happened between Feb 2000 and October 2000.
-
The market then bounced back from 200 week moving average - 20% bounce. This was Oct-Feb period - generally good period of equities
-
The market then tumbled below 200 week moving average in March 2001.
-
The market sharply tumbled 30% on break below 200 week moving average.
-
Time Correction - It took 29 months for market to recover once market slipped below 200 week ma. It was a painful slow recovery.
-
Every rally below 200 week ma got arrested at 200 week ma during those 29 months of recovery.
-
The bull market resumed when market finally broke out above 200 week ma in August 2003.
No comments:
Post a Comment