Last Friday marked the much-anticipated breach of the 7k level—which is not only seen as a technical resistance but also a psychological barrier for most. The next few sessions will now be make-or-break, in our view. A sustainable rally above 7k must include two things: 1) volume-fueled rallies and 2) short but warranted pullbacks. Indicators have yet to fully shift into buy signs, meaning that there may be leftover buying pressure spilling into this week. Note, however, that the index is treading closer to overbought territory. Indicators are not supportive of a bullish trend—there is a slight upward bias, but it lacks momentum. All things considered, the index may encounter another pullback before it reaches the next resistance at 7,160.
Recommendation: Buy on pullbacks