The domestic stock market opened the week with a negative bias, but in the midst of utter pessimism, it managed to bounce back sharply by the end of the week, which is an indication that the worst is behind us.When the market had fallen on the first day, adversely reacting to demonetisation, the total number of stocks hitting 52-week lows was 157 while the Nifty50 had made a low of 8,002.But later when the Nifty50 made a fresh low of 7,916, just 92 stocks made 52-week lows on the NSE, a loud and clear indication that the market breadth is turning positive slowly and the worst is quickly being discounted.These are the times when pessimism in the real economy is creating a compelling case for lapping up good quality businesses at reasonable prices. Soon, the market will digest the event and move on.Much has been said about demonetisation; that it is a war to flush out counterfeit and black money from the system akin to world wars to win over the countries by waging a war against them.During World War I, which began on August 1, 1914, the US had ordered shutdown of the stock market, but when trading resumed some four months later, Dow Jones Industrial Average opened 30 per cent down and from there on, it was one way up. It doubled during the continuing war, in spite of all the war talk and pessimism.World War II began in September 1939, in which the US finally jumped in, when the Pearl Harbour was attacked in December 1941. The Dow Jones Index had fallen 16 per cent after the Pearl Harbour attack, but even considering the day when the World War II first started, when in the US was not involved, the Dow Jones was down 33 per cent even from that top.Post the war panics, in both the instances, the US market doubled in a matter of just one year.The current demonetisation in a way is a war on black money and has made some stocks correct by 30-40 per cent from their tops, which make a super compelling case for investors to be in the market to take advantage of the once-in-a-lifetime opportunity to buy shares of great businesses.The stock market seems to be bottoming out at least in the short term. The velocity of the fall is receding, and the breath is turning positive. The 50 per cent correction from the top seems to be holding up the market and it can most likely act as a turning point for renewed upmove in the market.A strong base has been made at the 7,900 level. On the upper side, the market could face minor resistance at 8,300, but eventually it will break upwards and move beyond. Short-term traders should initiate long positions keeping stop losses below the 7,900 level while investors can aggressively build their long-term portfolios at current levels.The market is turning its gear from fear towards hopes and optimism. The peak of fear is behind us and so is the bottom. Other side-effects of fear are also visible in the rupee-dollar, which is just a kissing distance away from the 70 mark.The panic of importers suggests the top for USD-INR is also near, coinciding with a turn in the stock market. Companies such as Indiabulls Real Estate have announced share buybacks, proposing to buy back a huge 11 per cent equity capital.Such moves often suggest that the promoters, the intelligent insiders, find intrinsic value in their shares, which is a good sign for the bulls betting on a beaten-down sector. Open interest in Nifty futures is at a yearly low, indicating that fewer participants are interested in the market right now due to the uncertainty. But soon they too will jump in once clarity emerges, propelling the market still higher.Investors should take this opportunity to aggressively invest and build long-term portfolios while traders can initiate long positions with stop losses below the 7,900 mark. The Nifty50 closed the week 0.5 per cent higher at 8,114.(The author is CEO, SAMCO Securities. Views and recommendations expressed in this section are his own and do not represent those of ETMarkets.com. Please consult your financial advisor before taking any position.)