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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.

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Brian Sullivan

Brian Sullivan is co-anchor of CNBC's "Power Lunch" (M-F,1PM-3PM ET), one of the network's longest running programs, as well as the host of the daily investing program "Trading Nation." He is also a frequent guest on MSNBC's "Morning Joe" and other NBC properties.

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