The fundamental and technical case for S&P to hit 2,000

With stocks around the world rising Monday, some traders say short-term gains for the S&P 500 should continue thanks to changing sentiment among investors.

Erin Gibbs, equity chief investment officer of S&P Investment Advisory, said positive economic data could assist a minor recovery for the S&P 500. Among the good news, Gibbs noted that retail sales increased in January, with upward revisions for December. She also cited numbers from core CPI, jobless claims and industrial production that pointed to strength in the overall economy.

"We're seeing sentiment change, things are looking a little better," Gibbs said Monday on CNBC's "Power Lunch." "We could see valuations expand a little."

Gibbs said the data could drive up the forward price-to-earnings ratio on the S&P 500, which currently trades at 16.5 times forward earnings. Tentatively, Gibbs sees the ratio increasing to 17 times forward earnings, or around 2,000.

On Monday, the S&P 500 gained nearly 1.5 percent to 1,945.

Read MoreThe S&P is closing in on a critical level

Ari Wald, head of technical analysis at Oppenheimer, also is targeting a move to 2,000 for the S&P. Driving the short-term move, Wald credits deeply pessimistic sentiment among investors and greater volume into advancing shares than declining shares.

"Underneath the data, the volume trends have been very encouraging," he said Monday in a "Trading Nation" interview.

Specifically, Wald favors reputable, blue chip names to bounce higher than the rest. However, he also warns of another dip in equity prices, once the S&P reaches the 1,965 to 2,000 range.

"[We] still have to deal with this broken trend," Wald said Monday. "We think it's too soon to give the 'all clear.'"

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

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.

Follow Michael Santoli on Twitter @michaelsantoli

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