Market bounces back from oversold territory, but recovery unconvincing: Ajay Bagga

In a chat with ET Now, market expert Ajay Bagga shares his short-term outlook for the market.

ET Now: Were Monday's gains just a technical rebound and do you think this will get sold into soon?

Ajay Bagga: It was a pretty oversold market. Put-call ratio stood at 0.68 last week. There were expectations that the market would go down. But I think as Europe opened and there was a rebound both in euro as well as in the European stocks. Our markets also took heart from that and we saw some kind of buying coming in. So I would say the technical bounce back has not really broken the significant resistance level of 7,820. The index went higher above that, but then came down, mostly led by banks.

Banks were really taking the leadership; a little bit buying in capital goods and metal stocks was a big surprise. The rise in metal stocks can only be explained more as a technical oversold scenario, where positions were cut and we saw a bounce coming in. So, I am not reading too much into the market. The bounceback is welcomed, but it is not very convincing.