Here’s why more Nasdaq highs could be on the horizon

The surging Nasdaq composite is set to rise even higher over the next year, according to one bullish technical analyst.

"We've now got the Dow, we've got the S&P and now we've got the Nasdaq making all-time new highs," Piper Jaffray technical analyst Craig Johnson said Tuesday on CNBC's "Power Lunch," referring to each major index hitting new all-time highs in recent weeks.

While the Nasdaq opened a bit lower on Wednesday, the tech-heavy index on Tuesday hit its first record intraday high in more than a year.

"It looks like we're making kind of a classic bottoming-type pattern — left shoulder, head, right shoulder. We broke it above the neckline," he said, referencing a five-year weekly Nasdaq chart.

Johnson said this so-called "head and shoulders pattern" suggests further gains.

"I see more upside to the Nasdaq," said Johnson, estimating a 12 percent rise from current levels over the next year.

The Nasdaq, which includes tech heavyweights like Amazon, Apple and Google parent company Alphabet, rallied on the back of a stronger-than-expected jobs report released on Friday.

Not everyone is as bullish on the index, however.

"You look at February bottom; who bought that bottom? Really, when you start to look at these institutions, more of them are selling now, volume's been light," Steve Grasso, director institutional sales at Stuart Frankel, said Tuesday on CNBC.

Though he does not believe that Johnson's forecast is unreasonable, he predicted that "you're going to see a sell-off before we get another 12 percent higher in the indexes," Grasso said.


Trades to Watch

Trader Bios


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.

Sara Eisen

Sara Eisen joined CNBC in December 2013 as a correspondent, focusing on the global consumer. She is co-anchor of the 10AM ET hour of CNBC's "Squawk on the Street" (M-F, 9AM-11AM ET), broadcast from Post 9 at the New York Stock Exchange.

In March 2018, Eisen was named co-anchor of CNBC's "Power Lunch" (M-F, 1PM-3PM ET), which broadcasts from CNBC Global Headquarters in Englewood Cliffs, N.J.

Read more