Markets Will Stay Overbought: Strategist

Mary Ann Bartels, head of technical market analysis at Bank of America Securities-Merrill Lynch, discussed what investors should be watching closely in the markets.

“Markets are going to stay overbought,” Bartels told CNBC. “We’ve had targets on [the S&P 500] since the end of March at 1,055 to 1,065 — and I still think they’re doable.”

Bartels said it is important to consider the percentage of stocks that are over their 200-day moving average.

“We’re up in the 88 range. But I’d like to see that drop around 70 and then have the markets up,” she said. “That would give us a negative divergence.”

She also said the market needs less bears.

“Right now, we’re at about 25 percent according to Investors Intelligence [survey],” she said. “If we drop that below 20 percent, that would be the warning sign that there’s too much optimism in the markets.”

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