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'Nifty can touch 5,500-6,500, keep patience to invest at lower levels'

Traders on the Street are comparing this fall with the bear market of 2008 but, the technical structure suggests that things are even worse.

April 03, 2020 / 08:09 AM IST

Manali Bhatia

Fundamental data shows market could go into recession and Nifty may touch 6,500 in next 6 months but now the parameters show that the economy may enter into depression period (where GDP turns into negative territory, means it could be in between -1 percent and -5 percent) and the period could be quite long in comparison to slowdown/recession period.

It may be 2 years or more and in this period, Nifty is likely to touch 5,500 and the stocks are likely to be available at 10-50 percent (depends upon small cap-large cap) discount from their peak.

The good thing is the reason of recession would be coronavirus. However, depression territory would be due to an extreme drop in crude oil prices (likely to touch $12–15 per barrel) and there is again a chance of an acceleration of the US-China trade war. Probably, it would not convert into great depression (where multiple economies deliver drop in GDP by 15-20 percent) because tailspin crude oil prices affect many major economies but at the same time, it would be positive for emerging nations. So, be cautious, try to keep more patience and be ready to invest in lower levels.