Why stocks are setting up for a massive rally

Holiday shoppers may not be the only ones stuffing their stocking this holiday season. Fund managers may be doing some shopping themselves, only they'll be stuffing their portfolios with stocks.

That's because according to a recent study by Fundstrat, 74 percent of long-only active fund managers are underperforming the S&P 500 so far this year. And they're doing so by an average of 2.9 percentage points. Some consider this a bullish sign, as these managers will look to catch up to the market by buying any dips in the market.

Year-to-date, the S&P 500 is up 9.9 percent. So will the mad rush to play catch-up with the market help boost stocks by year's end?

"We probably could get up to 2,100, but I'm not that bullish on the S&P [500]," said Gina Sanchez, founder of Chantico Global. "As long as equities are the only game in town – which right now, that's the case –money will find its way back into it and probably will do so by year-end."

The technicals are also pointing to a higher S&P 500, according to the chart work of Todd Gordon, founder of TradingAnalysis.com.

(Read: Records broken in third week of gains for Dow, S&P)

Looking at the internals of the market, Gordon notes that difference in the amount of stocks advancing versus declining on the New York Stock Exchange is approaching zero. "It's been very flat as the S&P has contemplated this break of 2,019 which is that mid-September high," he said. "I see a little bit of a setback just as those internals reset. We need a good flush on the downside."

However, the market is still being supported by the Federal Reserve's balance sheet and liquidity efforts, said Gordon, a CNBC contributor. So, while he thinks the S&P 500 may pullback in over the next couple of weeks, Gordon expects the S&P 500 to meet Sanchez's expectation of 2,100 by the end of the year.

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And there may be more upside ahead. That's because Gordon's chart's show the index to be in a long-term trend channel.

"Resistance on the topside…has contained the S&P uptrend," he said. "In Q1 of '15, we trade at 2,200."

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