U.S. stocks which rallied over the past week could see a significant upside move, according to one asset manager, who said he'd been buying stocks over the last 3 weeks.
"The market resembles to me, back in 2009 when we made the call to get back into the markets in February and March," Graham Bibby the CEO & CIO of Richmond Asset Management told CNBC on Monday. "There are some stocks and sectors that are seriously undervalued, maybe the cheapest that I've ever seen them."
Bibby said he's become even more confident after all three major averages — the Dow, Nasdaq and the S&P 500 — broke above their 30 week averages last week and after a 10 percent rally in retail stocks such as Crocs , Abercrombie and Fitch , and Ralph Lauren .
"When you see a moving average falling and the market is rising, quite often that becomes resistance. But we've actually gone up through that - the averages seem to be turning up," Bibby said.
Bibby sees early indications of a breakout in financials and small caps. He's been buying into the Direxion Financial Bull exchange traded fund (ETF) , which he believes could double to $26, which was its previous high, should things in Europe start to stabilize. He's also been buying into the Direxion Small Cap Bull ETF .
Bibby has also been betting on some mining shares, such as Canadian silver miner Endeavour Silver , whose performance has lagged the rally in precious metals.