If you're worried the recent stock market selloff and subsequent recovery were signaling the end of this nine-year-old bull market, you're mistaken.

That's the take of Fundstrat analyst Rob Sluymer in a note Tuesday, March 6, who wrote that "despite the ongoing debate as to the markets' future path, U.S. equity markets are reacting positively to important technical levels."

Fundstrat said it continues to view the recent correction and consolidation in the stock market as a "pause within a bull market," and expects new highs in the second quarter of 2018 in line with its base case of 3,000 on the S&P 500 this year.

"The two technical developments that bear close watching in the coming weeks include monthly momentum indicators, tracking multi-quarter shifts, showing early signs of decelerating/peaking and relative performance divergences developing within the more cyclical areas of the market such as industrials," Sluymer wrote. "While these divergences need to be monitored, it is premature to state they are conclusive evidence the cycle is peaking."

Fundstrat, then, suggested that investors focus on sectors and groups "exhibiting leadership."

Such leadership has been accelerating in the technology space while the semiconductor sector is improving following a two-month correction. Fundstrat said, "One noteworthy characteristic of the recent market rebound continues to be the relative leadership acceleration to new highs by many of the secular leadership groups notably in software, services and internet."

Seminconductors peaked in relative performance in November and many names have corrected as much as 20%. But smart buys abound: Micron Technology Inc. (MU) remains "an example of a name breaking out of its three-month trading range," while Cree Inc. (CREE) is a "longer-term bottoming candidate," Sluymer wrote.

Financial stocks continue to emerge as market leaders, Fundstrat wrote. Sluymer suggested investors use recent pullbacks to accumulate E*Trade Financial Corp. (ETFC) and State Street Corp. (STT) .

As for the discretionary space, retail "continues to selectively improve." TJX Cos. (TJX) has pushed through as a "noteworthy" name in accelerating from long-term support at its 200-week simple moving average. In contrast, Fundstrat noted, D.R. Horton Inc. (DHI) and other homebuilders "are timely" following a first-quarter correction and move back to 200-day moving averages.

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