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BAML’s top technician: I was wrong—buy stocks!

Traders work on the floor of the New York Stock Exchange.
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Traders work on the floor of the New York Stock Exchange.

You could call it a valentine to the market.

MacNeil Curry, the head of global technical strategy at Bank of America Merrill Lynch, was bearish on the S&P 500 going into 2014. But now he says it's time to buy.

"Up until yesterday we had been bearish risk assets and the S&P 500," Curry said in a Friday note. "Yesterday's close above 1,823 says that view is WRONG and that the larger uptrend has resumed," he wrote.

The technician now holds that the recent strength in the S&P 500 "should project further upside for a test of the highs at 1,850—and perhaps on up to the long-term channel at 1,872."

What persuaded him to get bullish is the recent strength in the S&P, which has bounced nearly 6 percent off its lows Feb. 5.

"The setup was pretty bearish, frankly," Curry told CNBC.com. "We had the impulse of decline from the highs of 1,850, fairly negative seasonals, and a pretty sharp deterioration of breath. With all of that, I was pretty confident we would head lower and probably take a run at 1,711. ... That we've then reversed as hard as we have and started to trade quite bullishly says I'm wrong."

Earlier this week, he told CNBC.com that he noticed "breadth deterioration" in the market, "which is often what you see in a correction." He went on to note, however, that "if we close above 1,823, then things start to get more constructive."

(Read more: Bulls ready to trumpet new highs; caution prevails on rally)

The rebound "was really frustrating," he said. "But this is the nature of the biz. You get everything aligned and you take your shot. And you figure out where you're wrong when you're wrong, and move on."

(Read more: Byron Wien expects 20 percent gain for S&P 500)

Some bearish technicians are staying the course. Carter Worth, the chief market technician at Sterne Agee, is maintaining the downbeat stance on stocks he has held for over a year.

While noting that the S&P 500 bounced perfectly off its 150-day moving average, Worth said that "the continued rolling over in prominent names suggests that something is not quite as good as that bounce would suggest."

"More and more stocks just aren't in uptrends anymore," Worth said, pointing to the "representative" charts of large names such as Home Depot, Citigroup and Starbucks. "So the only way the S&P stays in an uptrend is that you have these steep circus freaks like Facebook. But it's the message of parts deteriorating that I think is the important thing."

(Read more: Kass thinks S&P should fall 9%, but is he right?)

Even as Curry is encouraged by the recent strength, then, Worth is continuing to advise investors to stand back.

"One day, it will all sort itself out," Worth warned.


—By CNBC's Alex Rosenberg. Follow him on Twitter: @CNBCAlex.

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