The stock market will soar another 16% this year as long as it stays above a key technical level, analyst says

• The S&P 500 is bound to see another double-digit gain to end the year, CappThesis founder Frank Cappelleri said.
• The market vet sees the index hitting 6,100, so long as it stays above a key bullish threshold.
• Stocks have been flashing a major bullish pattern for months, Cappelleri said to CNBC.

The stock market is still primed for another year of double-digit gains, so as long as the S&P 500 remains above a key threshold: 4,800.

That's according to Frank Cappelleri, a Wall Street veteran and the founder of the research firm CappThesis, who thinks the S&P 500 is still on track to notch 6,100 in 2024. That implies a 28% upside for the year and a 16% climb from its current levels, as long as the benchmark index remains above a technical threshold of 4,800.

The S&P 500 has soared over 27% from its low in October 2022, officially crossing the threshold into a bull market. Since the October trough, the S&P 500 has climbed consistently higher, troughed at higher levels, and has seen a "clean break out" through five technical thresholds — three signs that constitute a bullish pattern in the market, Cappelleri said to CNBC last week.

"6,100 level was based on the breakout through 4,800, which was a very big bullish pattern," Cappelleri added. "The good thing now is the market hasn't pulled back much yet, of course. So it has the ability to pull back 7-8% and still keep that breakout target intact." 

The bullish run-up hasn't been lost on investors, who have grown more exuberant about stocks in recent months as they price in Fed rate cuts and warm up to the possibility of a soft-landing for the US economy.

Traders are pricing in a 66% chance the Fed could cut rates 75 basis points or more by the end of the year, according to the CME FedWatch tool. Meanwhile, 50% of investors say they feel bullish on stocks over the next six months, according to the AAII's latest Investor Sentiment Survey. 

"It tells us that of course, investors want to continue to buy the dip," Cappelleri added. 

Some forecasters, though, have warned of storm clouds brewing over the market, given the risks that lay ahead in the economy. By some valuation measures, stocks are mirroring the bubbles of 2000 and 1929. Meanwhile, there's still a decent chance of recession coming in the next year, with New York Fed economists estimating the US has a 58% chance of entering a downturn by February 2025.