The has gained more than 2 percent in the past week despite the potential for a Fed rate hike as soon as June, and technical analyst Todd Gordon believes that it will soon go even higher.
The stock market is holding up "extremely well," said Gordon of TradingAnalysis.com.
In order to find levels to make a trade, Gordon uses a weekly graph of the SPY, an ETF that tracks the S&P 500. On the same graph, Gordon points out that $215 is a key level for the SPY because that's where it hits resistance.
From there, Gordon believes that the SPY could hit $215 provided that the ETF does break through the $210 level. These would bring the SPY back to its old highs from mid-2015.
Gordon's trade has him creating a bullish call spread by buying the July 210-strike calls for $3.06 per share and selling the July 215-strike calls for an 85-cent credit. This leaves him to pay around $2.21 per contract.
If the SPY does rise to the predicted $215 level, Gordon stands to make around $2.78 from his trade, or $278 per contract. If the SPY closes at $210, then Gordon stands to lose the $2.21 laid out, with a breakeven point at $212.21.