Futures Now

This is a Reagan-like rally and here’s how much higher stocks can go, Ralph Acampora says

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If history is any indication, the Trump rally is just getting started, according to one veteran technician.

Ralph Acampora, director of tactical investments at Altaira Capital Partners, sees similarities between the Dow's climb during the Reagan administration and its current rally under Donald Trump. The so-called godfather of the charts says that the current Dow advance is essentially going through a similar "honeymoon period" that followed Reagan's election.

"From the Election Day of November of 1980 to April of 1981, in just a six-month period, the Dow gained about 15 percent," Acampora said Tuesday on CNBC's "Futures Now." "That was his honeymoon period. Trump is in office now, since Election Day [it has been about] four months. So theoretically, if time has any impact, Trump might have a couple more months left to his honeymoon." The Dow is up more than 13 percent since the election.

But trouble could also be on the short-term horizon for the Trump rally. After Reagan's "honeymoon period," the Dow dropped by as much as 25 percent through the rest of 1981, which Acampora says happened thanks to the amount of time it took Reagan to implement his policies. According to the technician, Trump could face the same problem, meaning that a pullback in the markets could also be on the way.

Acampora, however, says that this doesn't diminish the fact that "that bottom in August of 1982 was the beginning of the next secular bull market that lasted 18 years." In other words, if history were to repeat itself then "what Trump wants to get done could long term be super positive for the market."

"I think you could have a similar run in time," he added. "Trump has another couple of months because he's four months after the November election. I think the momentum you're seeing now and the leadership you're seeing now begs that [the market] goes higher."

Just how high could the Dow go? Acampora believes that Dow 22,000 is only a few short months away, meaning that the index could have another 6 percent left to run by summer 2017.

All three major indexes hit record highs Tuesday. The is now up more than 10 percent since the election, amounting to a gain of more than $2 trillion in market cap.