The stock market fell on Monday and Nifty broke its first support level of 23800 with huge volume and closed below the level of 23650. Nifty fell by 168 points during this period. After this, a big falling candle was formed on the daily chart of Nifty, the effect of which can be seen in the future.

Nifty has formed a negative wedge on the daily chart with an upper wick on the daily chart. Technically, this market action is an attempt of a downward breakout of the range movement. This is not a good sign for market momentum and more weakness may come ahead.

Nifty has again broken the important support of 200-day EMA at 23700 levels amid volatile movement after Monday's price action and the initial downside gap of December 19 has not been filled even after seven sessions of its formation. This down gap can be considered as a bearish run-away gap, which usually forms in the middle of a downtrend, hence more downside may occur.

The short-term trend of Nifty is down trend and the market is expected to fall towards 23,500-23,400 levels in the short-term. He said that the immediate resistance is at 23800 levels.

According to the open interest (OI) data, the highest open interest on the call side was seen at 24000 and 23,800 strike prices, while on the put side the highest open interest OI was at 23500 strike price and then 23600.

Hardik Matalia of Choice Broking said that on the daily chart, the Nifty index formed a significant bearish candle with a long upper candle, indicating strong selling pressure at higher levels. After seeing intraday volatility, the index ended the session below 23,650 points. On the downside, the level of 23,600 acts as an important support. A break of this level can take the Nifty towards the 23,500-23,200 zone.

On the upside, Nifty 23800 is a major resistance, with the next resistance being 24000. A sustained close above these levels is required to move above the current bearishness. Given the increased volatility, traders are advised to remain cautious, keep strict stop-losses and avoid taking overnight long positions to manage risk-reward effectively.

Rupak Dey of LKP Securities said that Nifty fluctuated during Monday's session, moving between 23,600 and 23,900. On the Nifty daily chart, the index has slipped below its recent consolidation. Additionally, it continues to trade below the 200-DMA, indicating a weak trend. The overall trend remains negative for the short term with a potential downside risk. Support at the lower end of the Nifty is seen at 23400, while resistance in the short term is expected to be around 23870.