Stocks are coming off a losing week as they suffer through the summer doldrums, but it could be a buying opportunity for investors, according to chart analyst Katie Stockton. “We’re seeing some deterioration in equities but it’s not really that meaningful yet,” she told CNBC’s ” Squawk Box ” on Monday. She sees it as “a corrective phase, something that should yield a buying opportunity.” The S & P 500 is down more than 4% in August, as concern over higher rates for longer and a slowdown in China hamper investor sentiment. That would mark the index’s first monthly decline since February. .SPX 6M mountain S & P 500 in past six months. The founder of Fairlead Strategies noted this recent volatility comes “normal, seasonal” and that long-term momentum has shifted to the upside this year. “We’ll have an opportunity to take advantage of that sometime in Q4 even if it’s not long lived,” Stockton said. She added that the Nasdaq 100 index, which is driven by mega-cap tech stocks, has also lost momentum in the medium and short term. The gauge she tracks has been positive since mid-November but flipped negative last week. That’s significant, she explained, because it gives investors a time frame for what to expect from this corrective phase. “It tells us [stocks’] corrective phase should be more than just a three-week event … [it should be] something more in the six- to eight-week range,” she said. For the broad market S & P 500 , she takes the next key level of support from the index’s February resistance of 4,195. “A lot of people have that 4,200 level in mind and because of that, it could become self-fulfilling as support,” she said. The S & P 500 ended the trading week last Friday at 4,369.71.
