Sensex falls 500 pts from day's high, Nifty below 23,250: Key reasons behind markets paring gains

Sensex fell 500 points from day's high while Nifty was trading below 23,250-mark. 2) Selling in IT shares Selling in IT shares pulled down markets from day's high as the sectoral index rose for past two sessions. Nifty needs to trade above 23,350 for further bullishness to emerge in the market, said analysts. Technically, the Nifty bias is cautiously positive. Clearing 23,300 resistance targets 23,500.

The 23,000 mark is a crucial pivot, with the undertone constructive above 22,800 support (a break exposes 22,500), said Hemang Gor, Senior Research Analyst – Derivatives & Technical Research, Axis Direct. On the higher side, 23,175/74,800 would be the immediate resistance zone for the bulls. A successful breakout above this zone could push the indices towards 23,350/75,200. Further upside could extend the rally towards 23,500/75,500.

On the flip side, a fall below the 20-day SMA, placed near 22,600 for the Nifty and 73,400 for the Sensex, would make the uptrend vulnerable. Below these levels, short-term traders may consider exiting their long positions, said Shrikant Chouhan, Head Equity Research, Kotak Neo. "On the upside, immediate resistance is placed at 23,200, coinciding with a cluster of daily moving averages. A decisive breakout above this level could pave the way towards 23,700–24,000, where the 100-Week EMA and 200-Day EMA are positioned.

On the downside, immediate support is seen at 22,850, followed by the crucial 22,600–22,400 zone, backed by the 200-Week EMA and rising trendline. Traders may adopt a selective buy-on-dips approach while monitoring these key levels, said Hitesh Tailor, Research Analyst, Choice Broking.