The small cap index will keep shining: Technical analyst

What's behind lagging small caps?

The S&P small cap 600 index has already surged 11 percent this year, and it could be headed higher, according to one market technician.

Compared with the more popular Russell 2000 index, the S&P 600 "has more highly profitable companies in it, some higher quality companies and it's done better as well," said Ari Wald, Oppenheimer's head of technical analysis on Tuesday on CNBC's "Power Lunch. "

The charts look pretty favorable for the S&P 600, Wald added. Looking at a chart of the S&P SmallCap 600 index compared to the advance-decline line, Wald points out that more stocks within the index are rising than falling.

"We expect the S&P 600 to break to new highs because internal breadth in the index is broadening," Wald wrote in a Tuesday email to CNBC.

Stacey Gilbert, head of derivative strategy at Susquehanna Financial Group, said Tuesday on "Power Lunch" that when it comes to the options market, sentiment around small-cap ETFs is overall "not contrarian, nor is it crowded here; it does seem to be fairly mixed with a bullish bias."