Charts show Monday's new high is really bullish

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A new 52-week high after a long pause is a bullish signal for stocks that leads to a period of strong returns and fewer severe pullbacks, Bank of America told clients on Monday as the S&P hit record levels.

After trading sideways for more than a year, the set a new intraday high on Monday, surpassing the previous record reached in May 2015.

New highs by stocks after a pause of at least 300 calendar days are a "rare bullish signal," Bank of America Merrill Lynch technical analyst Stephen Suttmeier alerted clients in a research note.