Oversold bounce will continue in near-term: Expert

The US markets erased most of their gains to finish flat on Euro zone concerns. In an interview to CNBC-TV18, Ryan Detrick, chief technical strategist at Schaeffer’s Investment Research says, oversold bounce probably will continue in the near-term.

Below is the edited transcript of his interview on CNBC-TV18. Also watch the accompanying video. Q: US markets are holding in the green two days on a trot. A: That’s right. Day before yesterday obviously was an oversold bounce. The existing home sales in the US came in a little stronger than expected. In the last two weeks, we have had bad news out of Europe also, decreasing or disappointing economic data. Now that they got a little bit decent economic data, the rally has not fizzled out yet. Q: We have that big EU meeting today. The pressure on Spain’s banking system continues, the talk regarding a Greece exit continues. Do you expect these gains to continue on the US markets or who knows what time will bring this week? A: Yes, we do. The main reason is we are still extremely oversold. We know what they want and that is for Greece to stay in the EU mainly. We think that atleast at this time what they are striving for so for that reason. In the near-term, we think its oversold bounce probably will continue. But as we get into the future, all these uncertainties, which have led to the strong selling, are unfortunately still out there.