The S&P 500 is nearing a new high, and according to one top ranked technician, a breakout in one specific sector could set the stage for an even bigger move higher.
"The transports are underperforming the broader market by more than 5 percent year to date," Rich Ross of Evercore ISI said Tuesday on "Trading Nation." The Dow Jones transportation average is down nearly 4 percent in 2015, while the S&P 500 is up more than 2 percent over that time.
Technicians often look to the transports as confirmation of a broader rally since the stocks that comprise the index, mainly airlines and truckers and shippers, are so closely tethered to economic activity. According to Ross, the underperformance of the transports has left some market watchers on the sidelines, as many believe the transports are a leading indicator for where the market is heading.
"I tend to disagree and I think the transports could be ready to get in motion and provide the catalyst for the next leg up in the broader market," Ross said.