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A key model could be about to strengthen stocks.
According to Matt Maley, Miller Tabak's chief market strategist, with a penchant for technical graphics, Matt Trialy has raised the ascending triangle in many charts of the US stock market, including the S & P 500 index. .
"It's something you see frequently in a stock or an index, or both, that shows investors are cautiously optimistic," he told CNBC's "Trading Nation" channel on Tuesday. "In other words, they are ready to buy any kind of weakness, but they are not really willing to run after an action when it goes higher."
This reluctance to pursue creates a sort of ceiling for the underlying security, which is the top of the ascending triangle. But once the action or index is able to exceed the cap, it creates a new opportunity, said Maley.
"When this stock or index eventually exceeds this key level significantly, it shows that the sellers have basically sold what they are going to sell and that gives you a bit of a pocket air, and the stock or the clues can take off, "he said.
That's the case of the S & P, Maley said, adding that he would like to see the index stand at the 3,030 level to confirm the rally's resilience. This would allow "investors to move from cautious optimism to confident optimism," he said.
And this is not the only place on the market to benefit from this discreet scheme, according to the strategist.
"Look at Cisco, it's another model that is slightly above the peaks." They do not report [quarterly earnings] A little later, but if there is a little more positive follow-up, it will be positive, "said Maley.Also, Amazon, who reports this week, … [is] bang against his triangle, which could be a good catalyst. "
Mark Tepper, President and CEO of Strategic Wealth Partners, predicted that at least S & P's earnings would be capped, given the general expectation of the market that the Federal Reserve will reduce Interest rate several times over the next 12 months.
"I'm still afraid that the half-back [earnings] Expectations for this year are still too high, "he said in the same interview with" Trading Nation. "I'm not sure how much more valuation can continue to bring the S & P up being given that four rate cuts in the coming year are already taken into account. "
However, Tepper has seen more opportunities for some names, including Amazon and Cisco.
"We love Amazon – I mean, it's easy to see an increase of 20 to 25% by the next year." The valuation is extremely attractive for the amount of growth you're getting, and their competitive advantage on the side. Retail trade is extremely strong, "says Tepper. "What do you get [with Cisco] is … better than the market, you get decent growth. It's expensive relative to its historic multiple, but the company is just starting to turn its business into a healthier mix of software and recurring revenue, which we love. "
Overall, if you ask Maley, what everyone is currently looking for in the market may not be the most strategic thing to watch for investors.
"Currently, we are in a situation where everyone looks at the income relationship," he said. "If we can get through this season of results intact – which is a big one – that will be very positive, because if these things can go a little higher, the momentum could really be falling behind on all the market."
Disclosure: Strategic Wealth Partners owns shares in Amazon and Cisco.
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