💥Final View: Let the Market Correct for a Healthy Bull Run💥
Please understand that our market is not falling because of war, but due to overvaluation. Over the last 10 months, FIIs have been consistently selling. However, DIIs did not allow the Nifty 50 to fall, and the index continued trading near its all-time high, which kept valuations elevated.
For the past two months, I have been repeatedly saying that the market would crash before the start of the next bull run. However, markets do not crash without a reason—there is usually some geopolitical trigger. Now, the war has acted as that trigger, bringing the market down and helping normalize valuations. What I said two months ago has played out exactly, although at that time I did not know that a war would be the trigger.
Currently, the Nifty 50 PE is around 20.2. I have consistently mentioned that the market can form a bottom when the PE reaches the 18–19 range. To reach a PE of 19, the Nifty 50 may need to correct to around the 21,600 level. If the index falls to this level, we could see a sharp recovery.
FIIs are selling because they want valuations to become more attractive, ideally in the 18–19 PE range. I had earlier predicted a support zone around 23,000 ± 500, because DIIs always support the market even during FII selling. Now that we are close to 23,000, if the Nifty falls below 22,000, we can expect a strong recovery.
However, everything depends on the balance between DII buying and FII selling. If FII selling remains moderate, DIIs may not allow the Nifty to fall below 22,000. A fall below 22,000 is likely only if FIIs sell aggressively—above ₹7,000 crore daily.
Personally, I believe it would be better for the Nifty 50 to fall below 22,000 to make valuations more attractive. Further negative war-related news could act as a catalyst for this.
Please remember: more attractive valuations can lead to a strong bull run. If valuations remain high, we may continue to see a boring or sideways-to-bear market, like the one over the past 10 months where many investors struggled to make profits.
If you want to generate significant returns, valuations must be attractive—only then can the market deliver consistent gains. Markets are driven by valuations and earnings, not by war or political figures. Such events merely act as triggers to bring valuations to more reasonable levels.
At this stage, I would prefer more correction followed by a fresh bull run rather than a prolonged sideways or weak market. We are prepared to absorb short-term pain, knowing that portfolios focused on emerging sectors can recover quickly.
Now that we are already near 23,000, a further fall of more than 1,000 points could make valuations much more attractive. After that, FIIs are likely to return strongly.
Remember, FIIs are not selling because of the war—they are using the war-related news as an opportunity to bring market valuations to more attractive levels.
This coming Saturday, I will release a new YouTube video where I will explain a very simple way to identify the market bottom. I will use practical examples to make it easy to understand when the market is forming a bottom—no technical charts, no paid tools. I will show a simple method to identify when the Nifty 50 can form a bottom.🚀