Charts Predict: S&P to Rally 15%; Better Odds than Vegas

The S&P 500 will rally 15 percent in the next few days and has a better risk/reward ratio than you'll find in most casinos, Edward Loef, technical analyst from Theodoor Gilissen Bankiers, told CNBC.

S&P to Rally 15%: Chartist
S&P to Rally 15%: Chartist   

"The selling pressure is gone so I'm now looking for an upside break out," Loef said.

"I think we will see a nice rally in the next few days, I expect a 15 percent rally in the S&P 500," he added.

The S&P's lows of 2003 are acting as a bottom for the index, Loef said.

Video: watch the full interview with Edward Loef

The relative strength index, a technical momentum indicator which tries to determine whether a stock or index is oversold or not, is showing a positive divergence and an area of support for the S&P 500, Loef said.

"The reward to risk ratio of 2.5:1 and I think that's a better ratio than you get at a casino, so I think you should buy right now," he added.

A risk/reward ratio tries to determine whether a bet is worth the risk by comparing the expected returns with the amount of risk.

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