It was a nice week for the bulls, with Friday also providing some nice action into the close. However, this is not the time to get greedy or go all in if you are bullish and it would be in fact not be a bad idea to start booking profits, if you haven't done so already (Please read note at the end of the post). Here's why.
Coming straight up next week is 1340 - an important resistance level about which I have written earlier too. A move straight to 1340 from here would mean the market would be in the overbought territory - not a good position to be in when you are about to tackle an important resistance. In my view, the best case scenario for the bulls here would be a consolidation period, giving them the much needed time to recharge their batteries to tackle 1340, which would probably itself be reinforced by MA(50) by that time. All said and done, don't let the price action last week fool you, the bulls face some tough time ahead.
Take care and good luck!
P.S.: This post was drafted before the news on Spain but I still decided to go ahead and post it as after this news, the sentiment and outlook might have turned more bullish than what was suggested in the post but the technical resistance levels mentioned still very much hold true.
