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Expect 1,900 on the S&P 500: Laszlo Birinyi

Tuesday, 14 May 2013 | 11:32 AM ET
S&P 500 Could Hit 1,900: Birinyi
Tuesday, 14 May 2013 | 10:05 AM ET
Laszlo Birinyi, Birinyi Associates, explains why he thinks the next step for the S&P 500 is 1,700 with more room to run.

Investor strategist Laszlo Birinyi, who accurately predicted the S&P 500 would break 1,600, told CNBC on Tuesday he thinks the closely watched index could eclipse 1,900 in the longer term.

Expanding on bullish sentiment from hedge fund titan David Tepper, Birinyi said the market is for stock pickers, who should to look at individual companies instead of broad sectors.

(Read More: It's a 'My Cousin Vinny' Market, Bullish Tepper Says)

"I've been impressed with resilience of this market," Birinyi said on "Squawk on the Street."

"The pauses are only temporary, and now we've seen a rotation to the cyclicals. Looking at the market perspective, I still think we're going higher."

Birinyi pointed to Autozone, which was hit by a downgrade on Monday but bounced back quickly. "Those are the kind of things I think are more important," he said.

In the near term, Birinyi sees the S&P 500 going to 1,700, but in the longer term (after 2013) he said the index could reach 1,900. He called the 1,900 number "guidance" based on historical parallels, instead of a target. Birinyi's call earlier this year that the S&P would eclipse 1,600 came to fruition, leading to another bullish prediction.

He said his firm is currently buying S&P 170 calls on the SPDR S&P 500 ETF, a bullish options bet that the S&P will hit 1,700.

(Related: Cramer: This Is the Short's Worst Nightmare)

Birinyi characterized the climb as "a cross country trip," suggesting that there will be stops and starts along the way. "This market is very strong, but I want to take it one step at a time and I want to get to 1,700 before we decide where we're going after that," he said.

"People don't realize how strong this market has been," he said. "This has been the strongest advance-decline in the S&P over the last 20 years. What that means is that you want to be picking stocks. I think that's the key here. You want to pick stocks here and not worry about sectors or themes."

"When I look at the market, I look at what individual stocks are doing. People have been concerned about things like inflation, and I look at the inflation-sensitive names and they are not reacting the way you would expect them to if that was an issue," he added.

— By CNBC's Paul Toscano. Follow him on Twitter and get the latest stories from "Squawk on the Street" @ToscanoPaul

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