Technical View: Selling pressure to intensify if Nifty decisively breaks 23,400 zone, Bank Nifty extends losses

The benchmark Nifty 50 snapped its seven-day winning streak on profit booking and closed eight-tenths of a percent lower on March 26, a day before the monthly expiry of derivative contracts. This correction was expected, given the sharp run-up seen from the previous week, which is generally considered healthy. The immediate support is expected to be 23,400, which coincides with the 200-day EMA. If the index decisively breaks this level, the selling pressure may extend toward the 23,200-23,000 zone. However, on the higher side, 23,800 is likely to remain a key hurdle going ahead, experts said.

The Nifty 50 opened higher at 23,701 but could not sustain those gains for long. It traded lower for most of the session and closed at 23,487, down 182 points, forming a long bearish candlestick pattern on the daily charts, indicating the beginning of a short-term downward correction in the market after a sharp rise.

Bullish chart patterns, such as higher tops and bottoms, have started to form on the daily chart. The current weakness could be in line with the formation of a new higher bottom, according to Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.

He stated that the market is in a healthy downward correction, and one may expect the Nifty to bounce back shortly after forming a higher bottom. "The next lower supports are placed around the 23,400-23,200 levels. Any bounce from near the support could challenge the key hurdle again at the 23,800 levels," he said.