Dalal Street is likely to remain volatile this week as negative global cues would

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act as a drag on the trading sentiment of investors, analysts say.

Also, marketmen cautioned that with strengthening of dollar, foreign funds might be pulling out money from the Indian market and start investing in the US.

"Stock markets are oversold but there is no buy signal at the moment. Trading would be highly volatile and for the next 3-4 days the trend would remain the same," Geojit BNP Paribas Financial Services Research Head Alex Mathews said .

They said that markets are in a bearish phase right now and investors are fearing losses as the government is planningstimulus withdrawal.

"Market would continue in downward trajectory following which some recovery might set in. There might be a pre-budget rally after 2 weeks and investors should plan their exit around that time," SMC Global Vice-President Rajesh Jain said.

Some traders are of the view that with no major events lined up, focus is now on the government budget and traders would be picking their choice ahead of that.

At its third quarter monetary policy review on Friday, the RBI raised the cash reserve ratio (CRR) -- the amount of funds banks must park with the central bank -- by 75 basis points at 5.75 per cent and held key interest rates steady.

India's benchmark stock index recouped all losses to end 0.31 per cent higher at 16,358 points, with bank shares outperforming as interest rates were held steady.