Currently, the Nifty index is 7% below its record high of 26,277 touched on September 27 this year. Meanwhile, top CLSA technical analyst Lawrence Balenko believes that the Nifty will go further down from its current level. In an exclusive interview with CNBC-TV18, Balenko said that he thinks the Nifty could reach the level of 23,300 in the next 20 trading sessions.

Balenko said, "We have seen that now the downward momentum is increasing and the classic reversal pattern is head and shoulders, which we have seen at the August high, October high and then clearly at the early October high. Now we were expecting it to go back to the 200-day moving average (200-DMA), which would be around 23,300 points. So we see a possibility of at least 5% more decline now. This will take the market back to long term trend support."

According to Balenko, Nifty may face its 200-day moving average level for the third time this year. Currently, the 200-DMA for Nifty is placed at 23,389 level, which is also the lower boundary of the uptrend channel from the 2023 low. The analyst said, "We think we will hit those downside targets in November. So we think we will reach that level within the next 20 trading sessions. Yes, we will look for signals of support developing there. The last time we saw the 200-DMA was due to the intraday reaction to the general elections. The last time we saw the 200-DMA was during the sell-off in March-April 2023. In this way, we have come to the 200-DMA level on only two different occasions in the last 18 months and we think this is going to happen for the third time now." According to Balenko, the biggest decline can be seen in the PSU sector. Earlier this month, Balenko had pointed to downside risk in two PSU stocks Coal India and Power Finance Corporation (PFC). Tuesday's decline brought the BSE PSU index below its 200-day moving average, making it the most vulnerable sector to further decline. "We saw the BSE PSU index fall below its 200-DMA and it is currently moving in a downtrend. For more information on this, one can look at the performance of private banks compared to PSU banks. PSU banks have performed well since their lows during Covid till the beginning of this year and have seen improvement since then. Currently, we are seeing that private banks are maintaining their position, but PSU banks are performing weakly. Taking a larger perspective, if we talk about sub-sectors, PSUs appear to be the weakest sector here, which fell below its 200-DMA level yesterday," Balenko said.