Hoping for a fourth-quarter stock market surge to follow the current malaise? Your wish will be granted, predicts Prudential Securities technical-markets analyst Ralph Acampora.
The tech-heavy Nasdaq composite index will shake off its September blues and rally more than 20% in coming months, according to Acampora, who has been one of Wall Street's most prominent bulls in recent years.
The analyst told clients in a research note Tuesday that he has a near-term target for the Nasdaq index of 4,563. That would be a 24% gain from Tuesday's close of 3,689.10.
"My conclusion is that we've made a low" with the latest sell-off, Acampora said.
"I think we are starting a pre-election rally right here, which should be followed by a honeymoon rally. So I think we've seen the worst of it for a while," he said.
Acampora, like other market "technicians," mainly bases his forecasts on stock price chart patterns rather than on company fundamentals or economic data.
In August, Acampora reiterated that he sees the Nasdaq composite near 6,000 by June 2001. He also said the Dow Jones industrial average could hit 12,500 to 13,000 by year's end. The Dow closed Tuesday at 10,631,32.
In his latest note, Acampora said last Friday's early-morning battering of technology stocks, followed by an afternoon rally, marked a "panic day" that is a positive sign for the market.
The last time something similar took place was Aug. 3, he said, when the intraday low on the Nasdaq hit 3,521, but the index closed near the day's high, and from then on rose a total of 21% to a Sept. 1 high of 4,259.
"I think we're going to do the same, if not more, here," Acampora said. Whatever has been bugging the market--"whether it be interest rates, currencies, or energy"--will soon be abating, he predicted.