By James Langton
(April 18 – 12:30 ET) – Nervous investors are no doubt pleased with this week’s market rallies, but Merrill Lynch cautions investors that the market may not be over its jitters.
Richard McCabe, Merrill’s chief market analyst, says in a press release that the NASDAQ “may have periodic bounces, but it will need time to make a bottom.” Investors appear to be piling back into the market on the heels of the recent sell-off. McCabe says, “This correction could produce some attractive buying opportunities in time, but we would maintain a defensive approach now.”
The NASDAQ’s extreme volatility may be a sign that the market is oversold, a condition investors appear intent on correcting, says Merrill. However the firm also says the market usually needs to test a low before it can begin heading higher again.