Market trimmed most of the early losses which was on the back of extremely weak Asian cues to close the day at 5449. Yesterday, Nifty made a strong advance to close a shade below 5350 level. However, today’s early gap down, nullified all of yesterday’s upside strength. Nifty recouped more than 126 points from the day’s low of 5372 to make an intra day high of 5499. Today’s recovery from the low suggests that selling is reluctant at lower levels and this could help the build up for a medium term rally that may occur in the near future. Our pivotal level from where the short term positive structure appears sustainable remains at 5600-5625. Our medium term view remains neutral as long as the level of 5600 is not taken out on the upside.

The NSE Mid Cap index continues to indicate a short term resistance at 7700. A breach above 7700 can help this index advance till 8000 where it could counter stiff resistance. Some momentum indicators continue to suggest bearish fatigue at these levels.

For the Nifty in the medium term, we suggest a wait and watch approach for the next few days as long as the level of 5600-5625 is not breached. We see no reason yet to revise our positive bias for the market.