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How long should one wait before investing in the Market, fearing Corona Virus?

Nifty is falling fears Corona Virus. How long it will take to find the track of the uptrend? This question might hover in your mind after seeing the panic sell-off in the market. Corona is spreading one country to other, reaction, the market is breaking support one after another. When will it give a halt? Does anymore have this answer? 

In simple words, no one knows the exact level from where Nifty traceback. However, one can analyse those levels where it may give possible bounce back.

So, you don’t invest in nifty as one cannot predict the exact levels of bounce back? No, I did not say this. You can invest at different levels after analyse the chart and data of the Nifty. However, You should not try to catch the falling knife.
Let us consider a situation. Consider, you have 10 lakh rupees and you want to invest in the market. Now, you are excited to see the market crash as you gonna get the chance to invest low. But what happen if you trap in another leg of panic sell?
If you see this trend line break out in Nifty. It indicates Nifty may go towards 9,000 levels if it breaks 10k. Should you wait for this level? Does it come for sure? Again answer is one cannot say.
Nifty Trend Lines

If you look at these Open Interest Data of Nifty, This indicates the Nifty may move towards 10,700 and 10500 in the short term. However, This indicates a support at 10,800 levels. Again, this ensure you that Nifty will go to 10,500? No, Nothing is holy grail here.


Here is the solution
You can break your capital in five equal amount of 2 lakh each. You can start buying at a different level after seeing the Open Interest build on Option chain. You can buy your first installment around 10700, Second Installment when it reach 10,500. You can put your 3rd instalment when Nifty reaches towards 10k and so on.
What if the price doesn’t give a chance for further buying?
Yes, This very much possible that you may not get more chance for buying in low as nifty may reverse from anywhere. In that case, you can hold your money with you and if Nifty crosses 200 DEMA from down to up and start sustaining that you can buy over there. This may help you to survive the volatility of the market with your capital.

The Bottom Line
If the market is falling just due to Corona Spread then it will come back on the track if Corona starts disappearing from the country. If we get anti-dote of this virus this can boost the market as well. So, you can also wait for the settlement of the Corona Virus and once anti-dote arrived in the market then you can invest your rest amount.

How do you like to plan your investment during this scenario? Let us know. Comment box is for you. 

Disclaimer: The analysis has been prepared for informational and educational purposes only. It is not and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.

How long should one wait before investing in the Market, fearing Corona Virus? Reviewed by Kumar Chandan on March 06, 2020 Rating: 5

2 comments:

  1. Personally, I feel the market may start the recovery process, right now.
    We can expect an upward movement at any time now , but it will not be a sustained one. Also a slip may also occur at any time during the process

    ReplyDelete
    Replies
    1. Yes True!! Market is Volatile. Anything may happen. Thank You very much for stopping by here.

      Delete

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