Should Bulls be worried about the US DEBT CEILING CRISIS?

The US debt ceiling crisis is a situation where the government reaches its borrowing limit set by Congress, and it is unable to borrow more money to finance its operations. This crisis has happened before, and it is happening again now. The question that comes to mind is whether bulls should be worried about it.

The topic of the American debt ceiling is back and so is the fear-mongering by the US politicians and Western media. The US debt currently stands at around US$ 31 trillion and is on the verge of surpassing its debt ceiling of US$ 31.4 trillion

However, the debt ceiling crisis can have a significant impact on the stock market. If the government is unable to borrow more money, it might have to cut spending, which could lead to a recession. A recession would cause the stock market to go down, and bulls would lose money.

Furthermore, the debt ceiling crisis could cause a government shutdown. If the government shuts down, it could lead to a lot of uncertainty in the market. Uncertainty is something that investors do not like, and it could cause the market to go down.

Investors are therefore advised to not panic and make irrational decisions based upon exaggerated media headlines. The debt ceiling is nothing like its name suggests. It is like the sky which keeps on going farther away as we build high-rise buildings.

As the debt ceiling crisis unfolds, it is essential to keep an eye on the market's performance and take appropriate measures to mitigate any potential losses. Bulls should consider diversifying their investments and focusing on sectors that are less impacted by government spending.

Nifty has formed a strong candle on the weekly chart, closing above the previous week’s high of 18458.90. Nifty was consolidating between the 18050-18400 zones for the last three weeks. It finally managed to break the 18400 resistance on Friday and closed at 18499.35.

Nifty is now just 2.10% away from its all-time high of 18887.60 made on 1st December 2022. A follow-up buying from here can take Nifty to 18700-18800 zones while the lower-end support now shifts to 18300 from 18200 zones.