There are many definitions of a bull market. Some of the more commonly used are:
1. A bull market exists when the close is above its 200 day simple moving average.
2. A bull market is confirmed when prices move up 20 percent higher than the lowest low of the bear market.
3. The Dow Theory says that a bull market signal is received when prices go above rhe high of the previous intermediate top.
For the Nifty, all three of the rules have been fulfilled. The Index is trading well above its 200 day moving average. Prices are more than 20% higher than the lowest low recorded at 4530, and, we have seen a pattern of higher intermediate levels when the Nifty crossed above 5400.
Then, we are in a bull market. Our bullish stance however started when the Nifty crossed 4630 and has continued ever since. We did not wait for a thousand point rally to go long. One reason is that our view is based on momentum - since momentum continued to be favorable to the bulls, we remained bullish.
There will come a time when momentum will slacken, then it may actually turn negative. What will be our stance then? We will assume we continue in a bull market, unless proved otherwise. Any counter trend moves will be just that - against the trend.