Bank of America analyst: Don't short this rally, it has legs

After a grim start to 2016, the market appears to be back on the side of the bulls.

Stocks surged to year-to-date highs last week after dovish comments from Federal Reserve Chair Janet Yellen put investor fears at ease. All major U.S. indices posted their longest weekly winning streak since fall of 2015. According to one top technician stocks will continue to grind higher … for now.

"I think there's a little more room to run here on the S&P 500," Stephen Suttmeier told CNBC's "Futures Now" last week. "We're going to stay very short-term positive."

For Suttmeier, as long as the market remains overbought and the S&P 500 Index trades above its long-term 200-day moving average, stocks will be in the clear. The large-cap index broke above the 200-day last week for the first time since January.

Now, he is eyeing 2,085 as the next critical level for the S&P.

"Should we stall somewhere ahead of 2,085 and break that 200-day moving average, then I think the bears can come back into the S&P," said Bank of America Merrill Lynch's technical research analyst. "For now, we have overbought momentum and as long as that stays overbought you have to stay tactically positive."

Read MoreBernstein: Market will 'live happily ever after'

If the market were to fall short of that 2,085 level and pull back, Suttmeier suggested that the S&P could fall prey to a similar fate that took place in November and December.

"If we start losing some of these levels on the charts, that would suggest that we revert like we did into November and December," he said.

The market bounced off a double bottom pattern that was put in place by a low in August and late September. Following the second low, the index rallied into the late months of the year only to sell off sharply and make new lows in January and February.

Despite the potential for a similar fortune, Suttmeier said "for now you have to stay with it until proven otherwise."

Contact Futures Now

  • Showtimes

    Watch Futures Now Tuesdays & Thursdays 1p ET exclusively on cnbc.com!

Sponsor Links

  • CME Group brings buyers and sellers together through its CME Globex electronic trading platform and trading facilities in New York and Chicago.

  • Take your trading to the next level with a platform that lets you trade stocks, options, futures and forex all in one place with no platform or data with no trade minimums. Open an account with TD Ameritrade and get up to $600 cash.