As the market trades in one of its tightest ranges in history many investors are bracing for a big move either up or down. And according to one closely watched technician, the bet is higher.
"We ultimately think we get an upside breakout," technical analyst Ari Wald said Friday on CNBC's "Trading Nation." The S&P 500 has been in a tight range of 2,070 on the downside and 2,135 on the upside.
And there are two reasons behind Wald's optimism: the S&P 500's rising long-term moving average and the relative outperformance of small caps.
"The S&P 500 has been consolidating above its 200-day moving average," said Wald, head of technical analysis at Oppenheimer. "A general rule is that if consolidation occurs above this moving average, the move out of the range is most likely to be higher."