The domestic benchmarks recovered some losses on Tuesday after tumbling the most in nine months a day earlier. According to technical analyst Jai Bala, there could be further downside over the next few months.
Investors can expect a fair degree of downside to equities, Bala of Cash The Chaos told BloombergQuint's Niraj Shah.
His medium-term target for the Nifty is at 14,000 and even a bearish 12,500 “if things turn really sour”. However, he asserts that price action is key, and if the indices were "to reverse sharply from this fall, the bearish view will stand negated".
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Bala is negative on the IT and banking sector, but is selectively bullish on commodities, especially metals.
According to him, while the tech sector is headed for another 25-30% downside from current levels, there will be pockets of outperformance in the commodity space which investors can take advantage of.
Watch the full conversation here:
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