RECOVERY Patterns in Stock Market? Shall we start investing ?

Students 4 Best EvidenceLife After Recovery: The need for ...

Yes friends NIFTY is recovering, so shall we put our all money in the stock market to buy the stocks?

The answer will be NO. Invest only 50% of your portfolio as 2020 is a hard time and this CORONA virus crisis is not yet done. US elections are still remaining and Trump’s chances of getting elected are hard. There is a war for the title of world power, so this is a tough time to risk all of your portfolios.

                Invest wisely in some good stocks who have shown more than 100 % Recovery of fall. In this blog, we are going to study some recovery patterns and relate some DOW theory.


V-shaped recovery :

 

    This form of recovery is rare. Psychology behind this recovery is that sellers have sold stock very aggressively that the price was even below the discount and then as the usual bull rally is expected and sentiments change due to aggressive bull.  


U shaped recovery :

    As we can see bulls still doubt whether the first high is again going to make a new low or not so this U shaped part takes time to recover and when it again makes higher high then we can say we are in recovery.


W shaped recovery:

 


This is the most common type of recovery, it's lagging as compared to above 2 recoveries. Slowly the sentiments behind the stock start getting bullish and we can see a change in DOW theory and again see an uptrend.


L shaped recovery:


This is the very sluggish and slow type of recovery, talking about sentiments they are also not too bullish. Currently, the Banking sector is damn weak.

         Nifty is showing a better recovery pattern than bank nifty. So its better to not to invest in banking right now.

I hope you like the patterns and got some insights about recovery patterns. Do share and comment.



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