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Piper Sandler technician Craig Johnson said Wednesday that the S&P 500 (SP500) is poised for a rebound once the market works through the negative sentiment that has dominated trading lately. As part of this, he predicted a rise of 11% from present levels, with an index price target of 4,625.
In an interview with CNBC, the chief market technician at Piper Sandler said a correction was possible in the short term amid ongoing uncertainty about the Federal Reserve. However, he noted that the market has held up well, despite lingering concern from investors.
“If you look at some of the underlying indices, clearly it is trend lines over headlines,” he said. “All the negativity out there at this point in time, stocks aren’t going down. They’re starting to trend higher and we really need to pay attention to that fact.”
Johnson further stated that, “the world is already very negatively positioned and any drop will be bought.”
Looking at specific sectors, Johnson noted that tech is on the rise, as are names such as Regeneron (REGN) and other biotechs.
Looking at broader market action, Wednesday saw a choppy session, with the major averages giving up midday gains to finish the session in the red. S&P 500 (SP500) (NYSEARCA:SPY) -0.4%; Dow (DJI) -0.1% and Nasdaq Composite (COMP.IND) -0.9%.
For more analysis on inflation, see why Seeking Alpha contributor Lawrence Fuller says, “Inflation is falling as fast as it rose.”