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Nifty opened on a strong note but ensuing weakness after the gap up ensured that all the early gains were erased after few hours of opening. But a smart pull back from the lows of 5,478 post noon ensured that Nifty closes at 5,531. Our view in the short term is that Nifty will continue to face stiff resistance around 5,600 level. Technical indicators in the short term don`t point out to overbought conditions yet. Our medium term view remains neutral as long as the level of 5,600 is not taken out on the upside. The NSE Mid Cap index too is indicating a short term resistance at 7,700. A breach above 7,700 can help this index advance till 8,000 where it could counter stiff resistance. For the Nifty, we suggest a wait and watch approach for the next few days as long as the level of 5,600 is not breached. Only on a successful breach above 5,600 can the prevailing bias turn positive. This is an occasion to step back a bit to wait and watch the developments as they unfold.


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