Coronavirus is no more only a human infecting virus. Followed by strict lockdowns and disrupted supply chains it is degrading the world’s economy innumerable ways and its evident outcome can be seen as the sustainability of the market rally.
Rally is a sudden increase in stock prices, especially after a period of falling ones and this can be connected well with the present economic uncertainties due to COVID-19. If this increase in stock prices remains strong it is called the sustained rally. This type of ups and downs in the price can happen in both bull or bear markets. From the last month, the market has been in a bear rally. The Nifty50 intraday low was 7,511 on March 24 with a high of 9,391 on April 20, up 25 percent on absolute terms. The closing on April 24 was 9,154, which is up 20 percent on a closing basis.
After looking at the patterns of the market one can bet on these 4 stocks.
Currently, the crude stocks are changing rapidly and unpredictably, especially for the worse. So for traders, it is advised to take advantage of this trend and for long term investors, it is advised to accumulate for the next 8-9 months.
A trend similar to crude oil and currencies is seen in the equity market. So the traders can trade while the investors can wait.
A positive trend can be observed in the auto sector, which was underperforming in the last two years.
New buyings are expected in this sector as the economy opens post-June. Moreover, the social distancing trend will add boom in the new buyings as people now may avoid crowding public transports. Investors can look for 2 stocks that are Maruti Suzuki and escorts.
Due to the rise in the COVID-19 cases, other health-related problems, and strict lockdowns, the demand for pharma has been increased. Pharma and has been outperforming and is expected to continue the same. So, investors can take advantage of it. They can look for 2 stocks that are Torrent Pharma and Biocon.
The notable bear market rally occurred in the Dow Jones index after the 1929 stock market crash. So the investors can also analyze those trends.