Technicals Suggest ‘A Long Way to Go’ Down

Stocks might be oversold in the short-term, but technical indicators suggest a long bear market, Steve Hochberg of Elliott Wave International said Thursday on CNBC.

On "Fast Money," the company's chief market analyst noted that the S&P 500 closed below its 200-day moving average.

"But something else happened, too, in terms of technical analysis," he said. "If you draw a trend line off the October 2011 low, connect the June low of this year, and all those indexes are breaking down below that trend line.

"The Dow has done it. Nasdaq's done it. The S&P is breaking out below it, too. So, again, there is technical weakness under the market. We think the market is rolling over and is in a down phase right now."

Hochberg said that stocks were oversold on a short-term basis but could continue toward the June 4 low of 1,266.

(Read More: This Correction Level Signals a 'Buy' for S&P: Pro)

"It's 12,000 in the Dow. It won't be a straight shot down there, but I think we can stair-step and work our way lower," he said.

The trend line going back to the 1974 low was also interesting, Hochberg added.

"We bounced along the trend line, finally broke below it in 2008. We've have rallied back to test the underside three times now in August 2010, May of 2011 and March of this year. We rallied from the 2002 low in this ABC pattern," he said.

Hochberg suggested that investors could find upside in the decline.

"The Nasdaq presents a pretty good opportunity on the down side for the bears if you can pick off your targets," he said.

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