While market-watchers are undecided as to where the


will go from here, they agree on one thing -- breaking through the 2250 mark on Monday was a step in the right direction.

Many on Wall Street considered the 2250 level a technical resistance barrier, meaning that as the average approached that range, selling pressure began to build, which prevented the index from heading higher. The Nasdaq hit a recent low of 1638.8 on April 4, but has climbed steadily, tacking on 7.91 points Tuesday to close at 2313.5.

Mike Hurley, a technical analyst with

Wit SoundView

said "getting through 2250 was clearly a positive. Areas of resistance develop where supply for stock equals demand, and getting through that level suggests that there is more demand than supply."

To Hurley, the day after the Nasdaq hit its recent low was an important date. "The market in general is clearly on the mend," he said. "The significant point on the chart is April 5, not because the move was so great, but because that day saw up-volume swamp down-volume on the Nasdaq by nearly 25-to-1. To technicians, those are very significant days and ones that often coincide with bottoms."

Richard Dickson, technical analyst at

Hilliard Lyons

took a longer view. "Shorter-term, I'd be surprised if it held," he said. "

But it's the first significant trend-line break. It's a step in the right direction."

And while Dickson may not think the rally is sustainable in the near-term, he said he doesn't expect the Nasdaq to revisit the lows of early April. He said the worst-case scenario could see the index fall back to around 1900, but he indicated that the next resistance level is around 2400 to 2500. "I would be really surprised to see it get above that level for this particular rally," he said.

The analyst indicated that current positive investor sentiment violates the historical norms for the return of a bull market. "It's more likely we're in a countertrend move to

the bear market, rather than the start of a new bull market." He said the latest run-up seems to contain " a lot of enthusiasm" and "people are sort of climbing all over themselves." He suggested investors are afraid they're "going to miss the last train out of town, so I better jump on now." The typical start of a bull market, he said, is greeted with skepticism, not enthusiasm. Still, Dickson speculated that the index could reach 3000 to 3500 in next eight to 12 months.

Peter Green, a market analyst at

Gerard Klauer Mattison

, agreed that the Nasdaq likely wouldn't retest its lows of April. "The worst case I see is about 1941," he said. "There's a gap at 1941." The analyst cited two factors in particular that could deter the Nasdaq's rally. The first being increasing buying interest surrounding the stocks that trade for under $10, and the other if about 65% of investors turn bullish. According to the latest

sentiment survey from the

American Association of Individual Investors

, 51.8% of investors polled during the week ended May 16 counted themselves as bullish. The week before, bullish sentiment stood at 53.3%. Bearish sentiment, meanwhile, rose to 18.8% during the week ended May 16, from 17.8% the week before.

Hurley maintained that while a pull-back remains a possibility, he doesn't think that will be the case. "The Nasdaq has broken the downtrend line it was under from September 2000 through March, which suggests that the index is most likely done going down," he said. "And while revisiting the lows in the teens is possible, I think it's less likely. The Nasdaq could certainly work sideways to higher, but breaking the downtrend was another very positive development on the chart."

Though he doesn't have a formal price target on the Nasdaq, Hurley said the "internals are clearly improving" with the largest number of 52-week highs seen this week since March 2000, when the index reached its all-time high. "This is encouraging, and we're expecting to see the Nasdaq higher six months from now," he said. "The internals behind the scenes are improving and that suggests that the worst is most likely over."