×

'Tis the season to buy stocks: Technical analyst

The calendar is currently on the bulls' side, argues Ari Wald, head of technical analysis at Oppenheimer.

"March and April have been two of the four best performing months of the year for the S&P 500 when the index starts the month in a downtrend," Wald wrote in a recent note to clients.

Using data going back to 1950, Wald found that when the S&P 500 has begun March below its 200-day moving average — which it did this year — it has risen over the course of the month 60 percent of the time, for a 0.9 percent gain on average.


The comebacks have been even more powerful in April; when the S&P began that month in a downtrend, its average performance was a 2.0 percent gain, Wald found.

To the technical analyst, the strong historical performance in March and April is just one reason to believe that it is "too soon to play for meaningful downside," with another positive sign being favorable trends in trading volume.

Read MoreThe market's most speculative stocks stumble

While Boris Schlossberg of BK Asset Management does see seasonal trends as potential supportive, he's none too enthusiastic about buying stocks at present — particularly after a 10 percent bounce from the lows.

"There's definitely the potential here for a little bit of further upside" given how "grossly oversold" stocks were, Schlossberg said Monday on CNBC's "Trading Nation."

"But to me, this is all just a perfect opportunity to get short and shorter, and scale up into positions, because ultimately I think it's all going to fall over and keel over as we get into the summertime."

Videos

Trades to Watch

Trader Bios

About

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.

Brian Sullivan

Brian Sullivan is co-anchor of CNBC's "Power Lunch" (M-F,1PM-3PM ET), one of the network's longest running programs, as well as the host of the daily investing program "Trading Nation." He is also a frequent guest on MSNBC's "Morning Joe" and other NBC properties.

Read more

Connect