After Nasdaq and S&P 500 stocks rallied to new highs, one trader says the rally is just getting started.
"I think there's some real room to run here," said technical analyst Todd Gordon. "We're right in the middle of earnings season and the market is breaking out of a consolidation phase."
Stocks soared to record highs Friday, with the S&P 500 and Nasdaq closing the week at all-time highs.
Strong earnings results from Microsoft and Amazon helped boost the market last week—each soaring a respective 10 and 14 percent on Friday alone. Apple is set to report after Monday's closing bell, which should give the tech-heavy Nasdaq another leg up, said Gordon.
"If you look at a chart, you can see that the Nasdaq has been stuck in a consolidation phase that started in early March," he said Friday on CNBC's "Trading Nation." "This is very similar to what we saw in December through February."
To Gordon, this is a bullish sign for stocks, as the last consolidation phase ended in a sharp move higher in the Nasdaq, whiich closed Friday at 5,092.08. The pattern is also used as a measuring tool to find an upside target. "You simply take the length of the previous breakout, and add it to the current price," said Gordon, founder of TradingAnalysis.com.
"I think we're going to get up to around 5,120 in the near-term and above 5,300 long-term."
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