Trading Nation

This chart shows why one technical analyst is still a big bull

Another banner year for stocks?

After a great 2016, 2017 will be another good year for stocks, according to Piper Jaffray senior technical research analyst Craig Johnson.

"You can see after 2016 and 2015, you were in this kind of consolidation period, we finally broke out to new highs. And there's a new upward price channel that is emerging," Johnson said Tuesday on CNBC's "Trading Nation," examining a chart of the .

And that upward-sloping channel will continue, leading the S&P 500 to finish the year at 2,424, he forecasts. That would represent a gain of more than 8 percent off of 2016's last price.

The consolidation period Johnson is eyeing, between about 1,880 and 2,137, ended around the time of the U.S. presidential election in November, when the market surged in a postelection rally. And the upward-sloping price channel to which Johnson refers began in late February and early March of 2016, when the market began turning higher.

On Tuesday, the first trading day of the year, the S&P 500 rose for its best day in nearly one month, and opened modestly higher into Wednesday.

Johnson does not expect the market to reach 2,424 in a "linear fashion" without any turbulence, however, as the market could face headwinds. Rising interest rates, sector rotation and reflation throughout 2017 remain major themes for Johnson.

The Federal Reserve is expected to raise its federal funds rate three times in 2017. Johnson, however, wrote in a recent note that the likelihood of three rate hikes, amid an "accommodative Fed and the backdrop of a strengthening U.S. dollar," is slim, thus boosting this bullish outlook for stocks.

To be sure, Johnson has made bullish calls in the past. Johnson's 2016 year-end target for the S&P 500 was 2,350, which the market missed to the downside when it closed at 2,239. He also began 2015 with a 2,350 target, which he then lowered to 2,135 that summer; the S&P 500 closed that year at 2,044.

Piper Jaffray currently has one of the most bullish year-end S&P 2017 targets on the Street, as tracked by CNBC.

Chad Morganlander, portfolio manager at Stifel Nicolaus, is not quite as bullish as Johnson, forecasting a moderate return and a potentially bumpy ride on the year.

Morganlander wrote in an email to CNBC that investors ought to be "nimble" in 2017, and generally sees two challenges for the markets this year.

"One, Federal Reserve raising rates two to three times; I believe that could be a headwind. Also, trade issues: we do not know yet what the policy will be with trade. Those two things could unhinge the financial system," Morganlander said.