Sleepy Trump rally about to wake up according to this chart

The Trump rally still has room to run, according to one market technician reflecting on the president-elect's Wednesday news conference.

Comments by Trump, especially about drug pricing, momentarily reversed earlier gains made by markets on Wednesday. But while some might speculate that the so-called "Trump rally" could be coming to a close, MKM chief market technician Jonathan Krinsky believes that stocks can still head higher from here.

While Krinsky points out that the market has been in a "trading range," with the Dow specifically trading in a 1.5 percent range since December, technical indicators known as Bollinger Bands could be hinting at a move up. Bollinger Bands are volatility bands that are placed above and below a moving average, and according to Krinsky, they are at one of their most narrow points in history. This suggests that times of higher volatility, or big stock moves, could be ahead. Based on the postelection surge in stocks, Krinsky believes that in this case, the move would be up.

"Bollinger bands being tight don't necessarily predict the direction of the next move, only that the market will likely come out of this trading range," he said Wednesday on CNBC's "Power Lunch." "So we're going to stick with the trend that's been up for a while now, and we think that probably pushes you through Dow 20,000."

This means that Krinsky sees the Dow finally rising the 70 or so points it will take to reach the highly anticipated 20,000 milestone.

For his part, Harvest Volatility Management partner Dennis Davitt believes that Trump's Wednesday comments have a more global implication for investors.

"If Trump comes out and holds true to what he's saying, what I heard today was get long Russia, get long Mexico and finance it by selling China," he said, anticipating that a Trump administration means closer ties with Russia and an even bigger rift with China.

The S&P 500, Dow and Nasdaq had recovered their losses by Wednesday afternoon.


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.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

Read more