Bulls in the Hope Stage.

As the Nifty touches 4800, there may be a fair amount of hope among the bulls. The feeling is: we have touched the final lows of the bear market. Finally, the bulls may say, the end of the bear is visible.

I would disagree. Bear markets do not end with a lot of hope. They end with pessimism and capitulation. This is not visible in the market, at least not yet. At some point, bear rallies are likely to come about. I will treat any rally as a correction in a bear market, eventually expecting lower levels.

A head and shoulder pattern in the Nifty suggests a target of 4100. We should remember that patterns can fail, fall short of targets or exceed them. Therefore, a pattern is not an assured outcome. markets can do anything. But, patterns are what we have to trade with. Here is the Nifty head and shoulder.