Tech stocks are about to break out in a big way, according to one top technician.
"The Nasdaq Composite has outperformed the broader market this year, outpacing the S&P 500 [Index]," technical analyst Rich Ross said on CNBC's "Trading Nation." The Nasdaq Composite has rallied more than 7 percent year-to-date, while the S&P 500 is up just under 3 percent in the same period.
Against that backdrop, "I have high hopes for the Nasdaq as we head into next week," the Evercore ISI analyst said.
The next leg up?
Looking at a chart of the Nasdaq, Ross pointed out that the Index has formed an ascending triangle in the past six months. Technicians often recognize this pattern as a bullish sign that a stock, or index, is about to charge higher.
"We did break out briefly to a fresh new high last Wednesday, however that resistance remains intact," said Ross, Evercore's head of technical analysis.
"What I would like to see happen going into week is key support hold in here around this 5,000 level and then a move above this triangle at that 5,100 level," he added. A break above that 5,100, Ross said, will "set the stage for the next leg up in technology."
Ross added that he expects to see an extension of the gains seen in the semiconductor space, which should help the overall index propel to new highs. The semiconductor ETF, the SMH, has rallied 11 percent on the year and is sitting at an all-time high.
"I'm pretty optimistic as we head into the new week," said Ross. "I expect to see the Nasdaq at 5,350." That would imply a 5 percent move higher from current levels.
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