Nasdaq 100 is set to plunge 29%: Technician

Tech stocks had their best day since the financial crisis on Wednesday, leading markets on a major comeback. But according to one technician, these outperformers are about to see a severe pullback.

The S&P 500 information technology sector rose more than 5 percent Wednesday, the most one-day gains for the sector since March 2009. The Nasdaq 100 index ETF (QQQ), which has 25 percent of its holdings in Apple, Microsoft and Amazon, also rose more than 5 percent.

However, Todd Gordon of said the QQQ was about to break through a major support line in its uptrend.

"We're still very much in a consolidation that's lasted most of the week. I do think ultimately we resolve to the downside," Gordon said Wednesday on CNBC's "Power Lunch."

Gordon said he saw the Nasdaq 100 going to 3,000, which would be a 29 percent drop from its closing price Wednesday. This would represent a roughly 50 percent "retracement" of its long rally higher. That is, Gordon expects the Nasdaq 100 to ultimately give back half of its six-plus-years' gains.

"A 50 percent pullback is very common; it's very much to be expected in the course of a straight uptrend," Gordon said. "Markets just don't go up forever. That's just the reality we have to face."

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Boris Schlossberg of BK Asset Management said he didn't think stocks had reached capitulation yet. But he said there were several reasons why tech stocks were excelling in the current environment.

According to Schlossberg, tech companies were aided in volatile circumstances by their rich cash flows.

"They're the least debt-ridden, they're least vulnerable," Schlossberg said Wednesday. "[They have the] lightest sort of operating margins of anybody else out there."

Schlossberg also said tech stocks were more likely than others to see a forceful comeback, since their performance is highly correlated to that of the market.

After a six-day selloff, the Dow Jones industrial average, S&P 500 and Nasdaq Composite all gained about 4 percent by Wednesday's closing bell.

CORRECTION: This headline of this has been updated to reflect that the Nasdaq 100 is set to plunge 29 percent, according to one technician.

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Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

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