Don't worry, S&P rally is still intact: Technician

Stocks on Friday closed out their worst week since August, with major U.S. indices falling about 4 percent. However, one noted technical analyst said investors have little reason to be concerned.

Looking at the charts, Craig Johnson of Piper Jaffray said the recent sell-off is due to short-term profit-taking as investors cash out on the impressive October rally.

"What we're seeing is kind of a rotation, every sector is getting some profit-taking coming into play," Johnson said Friday on CNBC's "Power Lunch." "A month or two ago, it was the health-care sector; now it's starting to find it's footing. Now it's the consumer cyclical sector."

Despite concerns about consumer demand, energy prices and materials, Johnson said the primary trend for the S&P 500 is still up.

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"We've certainly lost momentum over the last week or so, and from our perspective not too surprising, given the October that we have seen," Johnson said. "So we're going to get a little bit of backing and filling here. Let's put this in the context that the bigger, longer-term, secular bull market is still intact."

Johnson said for the S&P to break its uptrend, the index would have to close below the 1,800 level, an 11 percent drop from where the S&P closed on Friday at 2,023.

Shorter term, Johnson said he sees support coming in around 2,020 and again at 2,000.

"We've got maybe another 1 percent downside before the market will try to rally," he said Friday.

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Sara Eisen

Sara Eisen joined CNBC in December 2013 as a correspondent, focusing on the global consumer. She is co-anchor of the 10AM ET hour of CNBC's "Squawk on the Street" (M-F, 9AM-11AM ET), broadcast from Post 9 at the New York Stock Exchange.

In March 2018, Eisen was named co-anchor of CNBC's "Power Lunch" (M-F, 1PM-3PM ET), which broadcasts from CNBC Global Headquarters in Englewood Cliffs, N.J.

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