Market Volatile

Dhiraj Agarwal, Independent Market Analyst, feels the markets will continue to remain fairly volatile with significant amount of downward pressure. "The market will continue to remain fairly volatile with significant amount of downward pressure. We will continue to see very large single day moves, which is not very healthy. This volatility needs to tone down for any meaningful recovery to happen. I won't rule out a retest of previous lows from which we bounced back because of liquidity and sentiment at this point of time. I don't think there is too much downside from a valuation perspective, but there could be some more hammering down from flows or sentiment perspective."

He sees about 3,800-3,900 on the lower side and about 4,500 on the upper side as the current range for the Nifty. "It is impossible to say whether we break through 3,800 or not, but even if we do, we will go down to significant new lows. I don't think the range will persist through the year. The range will break on one side or the other as we go towards the end of the year. After chopping around a couple of times in this range, it will probably break-up towards the end of this year in a strong bear market rally. Such high volatility after a deep cut or a strong rally is usually a sign of a trend reversal. However, we see a number of bouts of ups and down before the trend reversal finally sets in. "

Source: MoneyControl