After a market correction, investors are eagerly looking for signs of a potential recovery. One of the most anticipated events is the start of a bull run. But how can you tell if a bull run is really on the horizon?
7 Powerful Bull Run Clues: Will the Rally Return Now?
We’ll explore 7 powerful clues that indicate whether the bull run will return now after the correction. Understanding these clues can help you make informed decisions as the market prepares for its next big rally.
Clue #1 – Market Above 200 DMA
The simplest way to understand a bull market is this: when the stock market trades above a key average — like the 200-day moving average (200 DMA) — it signals bullish momentum. It’s not just a technical indicator; it’s a reflection of investor confidence.
For instance, Nifty’s bull market began at 17,500, paused with corrections, and reactivated once it again moved above the 200 DMA.
What is a Bull Market? Explained in Simple Words
A bull market means a phase of consistent upward movement in stock prices.
One key indicator is when the market trades above its 200-day moving average (DMA).
The 200 DMA is a technical line that shows the average price over the last 200 days.
Staying above this level suggests market strength and investor confidence.
It often signals a good time for long-term investing or momentum-based strategies.
After every dip, if the market recovers and crosses the 200 DMA again, it’s a bullish sign.
This level acts as a support zone during corrections.
A bull market can vary in length but is typically driven by positive sentiment and growth.
Different investors may define it in different ways, based on their style.
But this method gives a simple, data-backed way to track market momentum.
Clue #2 –India vs Global Markets
Globally, most markets are still below their 200 DMA, signaling bearish conditions.
However, India’s market stands out as bullish, supported by technical strength.
The Dollar Index dropping to around 98 also favors emerging markets like India.
Clue #3 – Why Is the Bull Market Justified? (April 2025)
Nifty has moved decisively above its 200-DMA after four months, signaling a strong bullish momentum.
The U.S. Dollar Index is at a multi-year low, making emerging markets like India more attractive to global investors.
Despite FII outflows, Indian retail investors have pumped in over $72 billion—providing steady support to the market.
Top companies like ICICI Bank and HDFC Bank have delivered better-than-expected earnings, boosting investor confidence.
The India Meteorological Department forecasts a favorable monsoon. Retail inflation is at a 5-year low, supporting consumption and agriculture.
FIIs have started re-entering Indian markets after months of selling, further validating the rally.
India’s fiscal deficit is expected to stay below 5%. Forex reserves are at all-time highs, signaling economic stability.
Sectors like Financials, FMCG, Defence, and Healthcare are showing strong relative strength and attracting capital inflows.
Many large-cap stocks have broken out above their 200-DMA, adding fuel to the bullish trend from a technical standpoint.
The RBI’s accommodative stance and government’s pro-growth reforms are fueling optimism among investors.Dollar Index is falling
Clue #4 –Importance of Sector Rotation
At any time, some sectors lead and some lag. Investors should identify which sectors are in the “green zone” and focus on them.
Top Sectors in the Green Zone and Their Stocks:
Banking & Financial Sector:
ICICI Bank and HDFC Bank are two strong players in the banking sector, known for stable income, a solid balance sheet, and digital leadership.
FMCG (Fast-Moving Consumer Goods):
Hindustan Unilever and Nestle India are top FMCG stocks, backed by strong brands, steady consumer demand, and consistent growth.
Energy & Renewable Energy
Tata Power Renewable and Adani Green Energy are leading the renewable sector, gaining momentum from supportive government policies and expanding clean energy projects.
Healthcare:
Dr. Reddy’s and Cipla are top healthcare stocks with strong global presence and consistent growth in pharma and wellness segments.
Infrastructure & Construction:
Larsen & Toubro and UltraTech Cement are key players in India’s infrastructure growth, backed by strong project pipelines and rising demand.
Sector rotation helps investors tap into high-growth areas by focusing on sectors in the Green Zone. But smart investing needs proper research and analysis before making decisions.
Clue #5 – How to Select Stocks?
Three key signals to look at when picking stocks:
- Sector rotation
- Earnings growth
- Market breadth
If all three are favorable and the stock score is strong, it’s a go.
Selecting the right stocks can be challenging, especially in a volatile market. However, with the right approach and strategy, you can make informed decisions that help you build a solid portfolio. Here’s a step-by-step guide on how to select stocks for your investment:
Define Your Investment Goals-
Short-term gains, Dividend income
Know why you’re investing — short-term profit, long-term growth, or steady income — your goal defines your stock choices.
Define your financial goal first — because the right stock depends on what you’re aiming for: returns, growth, or stability.
Understand the Industry and Sector–
Research Industry Trends, Evaluate Sector Rotation
Study which sectors are leading the market—like tech or pharma—and understand how sector rotation works in different market phases.
Look at Financial Health–
Revenue Growth, Profitability, Debt-to-Equity Ratio
Invest only after checking financial health—steady revenue growth, strong profits, and low debt are key signs of a fundamentally sound company.
Analyze the Company’s Management–
Management Quality, Corporate Governance
Trust companies with experienced leadership and transparent governance—good management is key to long-term success.
Check Valuation Metrics
Price-to-Earnings (P/E) Ratio, Price-to-Book (P/B) Ratio, Dividend Yield
Use valuation metrics like P/E, P/B, and dividend yield to assess whether a stock is fairly priced or undervalued.
Monitor Stock Performance and Trends
Technical Analysis, Price Action
Track stock trends using technical analysis tools like moving averages and RSI to spot momentum and entry points.
Assess Market Sentiment
News and Events, Investor Sentiment
Look for Competitive Advantage (Moat)
Moat: A company with a strong competitive advantage is more likely to succeed in the long term. Look for companies that have a wide moat, such as:
- Strong brand recognition (e.g., Apple, Coca-Cola).
- Proprietary technology or products (e.g., Tesla, Microsoft).
- Network effects (e.g., Facebook, Amazon).
Diversify Your Portfolio
Diversification, Risk Tolerance
Diversify your portfolio across sectors and asset classes to reduce risk.
Choose stocks based on your risk tolerance—stable or high-growth ones accordingly.
Keep an Eye on Macro and Microeconomic Factors
Economic Conditions, Company
Track both macro factors like inflation and GDP, and micro factors like earnings and leadership changes.
These elements directly impact stock performance and future growth potential.
Clue #6 –How to Detect Market Tops or Corrections?
When market breadth exceeds 90%, it’s often an overbought signal, suggesting a correction is due.
When it dips into the red zone, it indicates a market support zone or stabilization.
FOR EXAMPLE (Trading view)
US Market – NYSE/NASDAQ/AMEX
This chart from TradingView shows Advance/Decline Line data for the US market (covering NYSE, NASDAQ, and AMEX).
Key Data:
- Advancing Stocks: 6,443
- Declining Stocks: 1,660
- A/D Line: 80%
Advance/Decline Ratio: 6443÷1660=3.88 ,Percentage 3.88 X100=388%
Advancing stocks are 388% of Declining stocks
Interpretation:
The US market shows a strong positive breadth, with the majority of stocks in green. This typically signals a healthy bullish sentiment across sectors.
How to Calculate A/D Line Percentage?
The Advance/Decline (A/D) Line helps measure market breadth — i.e., how many stocks are rising compared to how many are falling.
Formula:A/D Line %(6443/6443+1660)x100= (6443/8103)x100=79.49%
Rounded off, it’s shown as 80%.
Interpretation:-This means that 80% of the stocks in the market closed higher, indicating strong market breadth and positive sentiment.
To calculate Market Breadth, we use the formula: for example
Market Breadth = Number of Advancing Stocks − Number of Declining Stocks
From your screenshot (NSE as on 25-Apr-2025, 12:36 IST)
Advances = 306 (Example)
Declines = 2,395(Example)
Market Breadth:
306 – 2,395 = -2,089
A negative market breadth (-2,089) shows strong bearish sentiment, as many more stocks declined than advanced. This usually suggests market weakness or selling pressure.
Formula:
A/D Line % = (Advances ÷ (Advances + Declines)) × 100
A/D Line %=11.33%
Only 11.33% of stocks advanced, indicating a very weak market breadth—a bearish signal.
Clue #7 Final Message:
7 Powerful Bull Run Clues: Will the Rally Return Now?
- Don’t depend on Twitter, TV, or Telegram for decisions.
- Trust yourself, build a process, and stick to it with discipline.
- To see the real picture, believe in charts and data—learn to read financial numbers and practice technical analysis.
What is a Bull Market?
A bull market typically refers to a phase where prices are rising consistently. Personally, I define it simply: when the market trades above its 200-Day Moving Average (200 DMA), it’s a bull market.
What exactly is the 200 DMA and why is it useful?
The 200 DMA is the average closing price of a stock or index over the last 200 trading days. It helps identify the long-term trend — whether the market is generally strong or weak.
Is 200 DMA enough to make investment decisions?
Not entirely. It’s a strong signal, but not the full story. Pair it with fundamental analysis, market sentiment, and personal risk strategy for better decisions.
When did Nifty’s bull run begin, according to the 200 DMA rule?
The bull run started around the time Nifty crossed 17,500 and stayed above its 200 DMA. That marked a shift in momentum.
What to do if the index falls below the 200 DMA?
It could signal market weakness or a potential correction. Stay cautious, avoid impulsive moves, and reassess your strategy before jumping in.
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Disclaimer:
I am just sharing my personal view as a trader.
Everything I discuss is for educational purposes only.
Please consult your financial adviser before making any investment decisions.
Trading in the equity market involves risk.
This blog is not responsible for any financial losses incurred by acting on the information provided.
