rewrite this title and make it good for SEOOversold market poised for short-term rebound: Rohit Srivastava

“But right now, at current levels, there are some oversold readings that allow us to look for some kind of a bounce back in the next one or two days,” says Rohit Srivastava, Founder, Strike Money Analytics.This is the sixth straight day of decline. How much more of a downside are you seeing when it comes to the benchmark at least?Rohit Srivastava: So, we are at an interesting level. Some indicators like the RSI are already at 30 and you start wondering is that oversold enough or are we really going to go into a bigger free fall. So, we are at that inflection, important support here, 23,500 to 23,200 is a support zone where we can possibly hit some kind of a bottom. So, I do not think we should immediately consider being excessively bearish here, maybe look for a small bounce first. I would be bearish if only we do not surpass 23,900 to 24,000, that is probably the key resistance zone. And if we do not go beyond that and do start falling again, yes, we can create a case that this will become a further extended decline. But right now, at current levels, there are some oversold readings that allow us to look for some kind of a bounce back in the next one or two days. Which are the sectors you think will lead this bounce back of sorts because financials has been doing nothing, IT today is down and out? Any sector that you would want to call out which will lead the bounce back?Rohit Srivastava: So, let me state this that it all starts with some hope and I am saying a bounce for a day or two before I can actually take a bigger picture view. And for that reason, it may not be apt to really consider any stock or sector as of now. It may be a very small trade because if it is only going to bounce for 200 points and fall, then you would end up buying something and get stuck because it is not necessary everything moves up. Just like you are seeing tech going down on today and not really banking falling tomorrow. It could be banking leading the way down because the banking index has not necessarily completed its move down. Last week when it broke, that congestion zone below 50,500, it looks like it does have room to go back to 48,300. So, there are still risks on the table. So, when I am saying there is case for a bounce, I am not saying it is like a 100% scenario that you go out and start betting on it. I am just saying let us be watchful. For all you know, the bounce is a selling opportunity and we will take it as it comes and banking, like I said, is the one that is making me more fearful of further declines. Whether this bounce that you are expecting the markets to come in, will that sustain or can you just give us some range where you expect the market to pan out for, say, at least the next three months?Rohit Srivastava: So, if I put the resistance, like I said, at 23,800 to 24,000, then till we do not get past that right now, we will have to become open to 23,200, maybe 22,800 or maybe even lower. So, we have to keep all our odds open right now because this is being sort of a freefall. We were anyway selling off on our poor earnings and so on, October which is usually a seasonal period where you get corrections. What has not helped is that simultaneously the dollar has been going up. So, from the start of October, it is Nifty down and dollar up. And the rising dollar is now putting pressure on almost most emerging markets, Europe, and only the US has started to give up now. So, the next thing I would really want to watch out for, do we get a reversal in the dollar? Now, if I look at the dollar standalone, it does not look like. All the levels where it should have stopped have failed, which means that it is possibly in a stronger uptrend right now and that risk is not out. So, with that risk not gone away, I would keep all the downside levels open till we get a very clear-cut case that yes, we are rebounding beyond, like I said, the 23,800-24,000 zone. Now let us say we do get beyond that, what would happen? You would end up getting like a 50-60% retracement to the entire fall that we have seen in Nifty and that can maybe get us back to a close to a 25,000 kind of number. But once again, it might not mean new highs. So, even if you do get this kind of a sharp rally at some point of time, it would end up being what we call as a B wave, basically a countertrend bounce, they are very sharp, they are very severe, they make you feel like, okay, the worst is done, but then they get sold into again. So that is the setup that we are slowly walking into, that even when we do get the next significant bounce, it may not be a move to new highs.