×

Charts show a clear runway for an S&P 500 takeoff, says analyst who called last summer's rally

  • BTIG's Katie Stockton tells CNBC the path of least resistance is higher now.
  • The S&P 500 plowed right through its resistance level and is now poised to reach 2,640, Stockton says.

The S&P 500 broke right through its resistance level and is now poised to reach 2,640, technical strategist Katie Stockton told CNBC on Tuesday.

Last July, Stockton predicted on CNBC that the S&P would make a move to 2,400. The index was trading around 2,135 at the time. In May, the S&P closed above 2,400 for the first time ever.

"We plowed right through it. So, the S&P 500 broke out and confirmed that breakout," the chief technical strategist at BTIG said on "Squawk Box." "It really sat there for enough time to suggest it was a real breakout more than something that could be a false breakout. And we saw follow-through. So that's bullish."

The path of least resistance is higher now, Stockton said. She said momentum has been key in the index's performance, but that doesn't mean the market won't see a pullback along the way.

"I think we're going to see some outperformance in the financial sector, which was really the leader in Q4 of last year, which is the launch of the rally that then gets us to that 2,640 target," she said.

Also on "Squawk Box," the head of technical analysis at Cornerstone Macro said there are all sorts of way to look at a measured move.

"If you look at the long-term chart and the lows of 2009 and the peaks of 2000 and 2007 and do a measured move off those tops of 1,575 really it starts to imply not much more than 2,480," Carter Worth said.

Worth said even as the market goes higher, it's all risk-off.

"All year long has it been right to [be] offensive or defensive?" he said. "Offensive is buying cyclicality and yet cyclicality is underperforming: financials, industrials, energy."

"What's performing is defensive, which is growth," Worth added. Stockton said the defensive sector rotation has been an issue but believes it will change in the near term.

— CNBC's Matthew Belvedere contributed to this report.

Morning Squawk: CNBC's before the bell news roundup

Sign up to get Morning Squawk each weekday

Get this delivered to your inbox, and more info about about our products and service. Privacy Policy.
Please enter a valid email address