Hey everyone, this is my first post and i hope someone learns something out of it.
As we all know indian market has touching ATH almost every day and whenever a slight bad day comes everyone starts anticipating a crash. But what is a crash or say if a crash comes, how far the market can fall? If there is a correction how much the market can correct? Well, there is a very good mathematical tool to build an expectations around this question - Fibonacci tool.
In an uptrend use the tool from the start of the uptrend ( assuming end of second wave june 22) till ATH level (vice versa for downtrend). Now there are three important levels - 38 percent, 50 percent and 62 percent in this tool. In a strong bull market like ours, a correction is generally till 38 percent level. In a weak bull market, it can be till 62 percent level. So assuming a 38 percent correction it can fall anywhere till 21500 (election day low) if at all market starts correcting from here.
Hope you liked this information and understood how this tool can be useful.
PS - Historically Septembers are a month of corrections in market.
As we all know indian market has touching ATH almost every day and whenever a slight bad day comes everyone starts anticipating a crash. But what is a crash or say if a crash comes, how far the market can fall? If there is a correction how much the market can correct? Well, there is a very good mathematical tool to build an expectations around this question - Fibonacci tool.
In an uptrend use the tool from the start of the uptrend ( assuming end of second wave june 22) till ATH level (vice versa for downtrend). Now there are three important levels - 38 percent, 50 percent and 62 percent in this tool. In a strong bull market like ours, a correction is generally till 38 percent level. In a weak bull market, it can be till 62 percent level. So assuming a 38 percent correction it can fall anywhere till 21500 (election day low) if at all market starts correcting from here.
Hope you liked this information and understood how this tool can be useful.
PS - Historically Septembers are a month of corrections in market.
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