The Nasdaq soared almost 2 percent during Monday morning trading, and one trader believes that it's time to bet on tech as the markets head up.
Friday on CNBC's "Trading Nation," Todd Gordon of TradingAnalysis.com predicted that the stock market "wants to rally" after the day's strong jobs report. Gordon believed that the market would finally break the "massive" resistance that had persisted for a year and a half as stocks seemed to trade within a range and go nowhere.
Now with the market at a high, Gordon encourages traders to take a look at the Nasdaq for a trade. Specifically, Gordon is looking at the Nasdaq 100–tracking QQQ ETF, which holds some of the largest big-cap tech stocks, to make his bet.
Gordon believes the large-cap Nasdaq index is set to rise even more, pointing to a gradual drop in the QQQ as an indicator that the index could be headed up.
"The Nasdaq daily chart has been in a long-term consolidation, and I'll define that consolidation coming from late 2015 if we draw a trend line through all major significant highs," he said Friday on CNBC's "Trading Nation." "You can see we're coming to a key test of about $110."
Gordon also takes a look at the ETF's implied volatility, which uses options prices to measure the size of expected future moves.
"We're looking at implied volatility to the QQQ, and you can see implied volatility down at about 13 or 14," he said. "Options are very cheap because volatility is very low, so let's use this opportunity of cheap options pricing to get some upside exposure."
Gordon's trade involves buying the August 112-strike call and selling the August 117-strike for a total cost of $0.93, or $93 per options contract, which is his total risk. If the QQQ closes at mid-August expiration at or above $117, he is set to make a $407 profit.
That said, "if we move up into the $115, $116 mark and the market seems to hesitate, you can go ahead and take this trade off."
The QQQ has surged from $102 to over $110 since the Brexit vote at the end of June, recovering to a two-month high. Still, the Nasdaq 100 has lagged the S&P by more than 5 percent this year.