GOLDMAN: This 'textbook' rally in stocks has a long way to go

After a post-Brexit misstep, the stock market has regained its footing and roared past all-time highs in the past week.

The strength has been broad-based and it appears to Sheba Jafari, a technical analyst at Goldman Sachs, that this upwards trend in markets can continue for a long time.

"If this is truly a 3rd wave from June, it should really move past 2,191 and eventually reach a 1.618 target at ~2,263," wrote Jafari in a note to clients Sunday.

Jafari, who calls the recent rally "textbook," is using a method of technical analysis that posits that market behavior is orderly and moves in "waves," thus it can be tracked as long as you can read the signals that the market is telling you.

Based on these signals, Jafari believes that not only is there a short-term uptick of at least 100 points in the S&P based on Friday's closing price, but in the long-run there is even more good news for stock investors.

"Narrowing in even further, the move since February is likely to be wave (5) in a sequence that starting in 2010," wrote Jafari. "As such, the minimum target for wave (5)/III is 2,172 (now effectively satisfied). An extended target goes out to 2,394-2,452."

So to clarify, in the short-term Jafari is projecting a target of 2,263 and over a monthlong time frame the index should get as high as 2,452. To get to these points, however, there may be some pain.

"Would view 2,263 as an ideal place to start a 4th wave correction," Jafari warned. "Pullbacks up to that point should be shallow and short-term (similar to price action earlier this year in March/April)."

There may be some stumbles on the way up, but evidently Jafari thinks the rally has a ways to run.