Watch | Market could be close to bottom if there is no recession in US this year, says Bank Julius Baer

There could be a 10-20 percent rebound in oversold stocks over the next few days, he said.

“The tech stocks, in particular, are much oversold, only about 15 percent of the NASDAQ members are trading above their 200-day moving averages, which in the past has coincided with bounces. So, we could get a very vigorous 10 percent maybe even 20 percent bounce in the oversold growth stocks between now and the end of the month,” Matthews told CNBC-TV18.

The rally will extend till the end of this month, he said.

“We rally into the remainder of the month. We have six down weeks, which is the longest stretch since 2011, and seven down weeks that have not happened since 2001."

Matthews does not expect inflation to return to pre-pandemic levels as commodity prices remain at elevated levels

“I do think that as much as inflation peaked in March, and will continue to come down, it will not go back to its pre-COVID levels because commodity prices are going to stay pretty high.”