(Bloomberg) -- The S&P 500’s best week in a year was driven by investors locking in profits on bearish bets, suggesting little room for further gains, according to Citigroup Inc. strategists.

Flows in contracts tracking the benchmark index last week were dominated by short covering — where traders buy shares to close out open short positions, strategist Chris Montagu said, adding that overall positioning remains “moderately bearish.”

“In short, profit taking has led to cleaner, less skewed positioning and with that a reduction in overall positioning risks,” Montagu wrote in a note dated Nov. 6. “Market gains on the back of further short covering appear less likely in the near term.”

The S&P 500 has rallied this month after dropping 10% from its July peak, as bond yields retreated on bets that interest rates were peaking. However, top Wall Street strategists, including those at Morgan Stanley and JPMorgan Chase & Co., have said they don’t expect the rally to last amid elevated rates and slowing growth.

Contracts tracking the S&P 500 were down about 0.2% in early trading on Tuesday, setting up the index to snap a six-day winning streak.

The outlook is turning more positive for the technology heavy Nasdaq 100 index, Montagu said. About $3 billion in new “risk flows” were added to Nasdaq futures last week. On a normalized basis, positioning is now only marginally bearish, “a considerable swing from the week before,” Montagu said.

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