Bearish means Negative or downward movement. If an investor says he is bearish on the stock market, it means, he expects the market to fall.
The name of the animal ‘bear’ is used to suggest a negative or downward market because the ‘Bear’ attacks its opponent by pushing it down, the movement is downwards. The bull attacks by pushing its horns up, the movement of attack is upwards.
That’s the reason the words ‘bull’ and ‘bear’ are used to define the stock market movement.
When you read the words ‘bearish’, it’s important to understand the context.
Some quotes you might hear on news channels or read in news papers:
When an analysts says “I am bearish on Sun Pharmaceuticals” it means the analyst is negative on the business prospects of Sun Pharma. In most cases, these are medium term views that can change when the business prospects change.
“Short term view on Nifty is bearish” this news was published on Money Control. This means, the analyst expects the Nifty to fall in the short term (usually few days). So the analyst is asking traders to be cautious on buying and possibly suggesting that it could be a good opportunity to short Nifty. Such news pieces cannot be taken seriously, you need to do your own analysis on the charts.
“Bearish on Nifty for 2020” You would probably get to hear these statements at the beginning of the year. This means, the analyst expects the NIFTY 50 to give negative returns in the year 2020.
“Mid caps and small caps were in bear market in 2018 and 2019” when you hear this statement, it means the smaller companies (mid and small caps) have performed poorly in 2018 and 2019.
“The chart of Havells looks bearish” when an technical analyst says this, he is trying to convey that according to his chart analysis, he expects the price of Havells to remain under selling pressure. It might fall further in the next few weeks / months.
The term ‘bearish’ can be used not only for the stock market, but anything that can fall in value. Like Gold, Real Estate, Global Economy, Bitcoin, Currency etc.
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