5 Signs to Know that You are in a Healthy Bull Market

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Indian stocks have rallied and rallied non stop. Not many are betting on a trend reversal at this stage. On Friday the markets closed at the highest level of 29,278 points. Here are 5 signs to know if we in a healthy bull market.

Market discounts even the bad news

When stocks do not react to any bad news, it's a sure sign that you are in a healthy bull market. For example, Sunday's election results in Greece in which anti-austerity party won the elections was widely expected to be negative. Markets in Europe did not bother about the results and rallied, with Asian markets following.

There is no Sector that is an Underperformer

What happens is when individuals chase stocks in a bull market, they start also chasing many sectors. For long we seen Bharti Airtel from the telecom sector languishing. But now even that stocks is showing signs of life. In a bull market, typically all sectors rally.

People are back into mutual funds

When investors are back into mutual funds, it's a sure sign that we are in a bull market. Investors have pumped in a massive Rs 1.3 lakh crore into various mutual fund schemes in the first eight months of current financial year (2014-15), mainly on account of strong inflows in equity and money market categories.

Penny stocks are back

When penny stocks rise and loss making company shares give you returns like 100 and 200 per cent in a short span of time, be rest assured that you are in a bull market.

Reaching successive highs

When the indices keep touching successive highs it's a sure way to know that we are in a bull market. The Sensex in the last few days has hit seven consecutive closing highs, ever since the RBI cut interest rates.

Read more about: bharti airtel, bull market
Story first published: Tuesday, January 27, 2015, 9:04 [IST]
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