As the markets have now broken the 12614 – 12707 level we have very quickly reached the next resistance level.
Last week saw a narrow range week which technically suggests that uncertainty is on the minds of traders. Of course over the last three months we have had mostly a ranging market and at some point we are likely to see a conclusion.
If the market continues to trade higher, then this would mean that the short term trend is still in play and we would keep our eyes on upside Fibonacci targets. Right now we are already at the next juncture which is 12916 – 12960 and Pivot lows would need to be monitored in case the market decides to do a sudden u-turn and head lower.
Therefore 12650 is an important support level which if broken could suggest that the current move up may be a false breakout. Although we did see a triple top formation, we have climbed above the classic pattern but only just and we would prefer to see a sharper rally rather than a thin narrow range move.
At least for now we still have the index above its 20 day Moving Average and the RSI is still positive so at least we can say that the market is still in bullish mode.