With one month until the presidential election, Piper Sandler analyst plots S&P 500's key levels

Uncertainty in Washington is keeping Wall Street in check.

President Donald Trump is in hospital after testing positive for Covid-19.

Some breakthrough in relief talks on Friday between House Speaker Nancy Pelosi and Secretary Treasury Steven Mnuchin sparked hope.

All this comes less than a month until the presidential election.  

Craig Johnson, chief market technician at Piper Sandler, does not see an ongoing negative impact for markets from Trump's Covid diagnosis and treatment. However, he does see technical reasons for the S&P 500 to be stuck in sideways trading.

"First and foremost, I think we've got to look at that high back in September on the chart as really a marginal new high right now," Johnson told CNBC's "Trading Nation" on Friday. "And we need to be focusing on the fact that we did have an uptrend violation coming off of those April lows and all the way up to where we are right now and we're just kind of stuck in a trading range." 

He sees 3,386 to 3,400 as the upper end of that range with the lower end acting as support around the 50-day moving average at 3,364 and 200-day moving average at 3,112.

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"For now we're stuck in a range. And again, we need to be a little bit more careful than we have been previously. It was easy making money off the March lows, but now with these levels, you've got to be a little bit more careful," Johnson said.

Danielle Shay, director of options at Simpler Trading, agrees that markets are rangebound until the election. She does still see opportunity within individual stocks, though.

"I have had a great time trading the Covid stocks," she said in the same "trading Nation" interview. "These are the companies that haven't just remained strong but they've benefited from the pandemic. What I've discovered this year, primarily, is that looking at individual sectors has not been working as well but looking for companies like Peloton, Chewy, Walmart, Teladoc, DocuSign, Zoom, Amazon, there's plenty of opportunities in trading these companies and buying and holding them because they're doing so well throughout the pandemic."

Video conferencing stock Zoom, for example, has been one of the top performers this year, rallying more than 600%. Amazon, one of the largest stocks on the S&P 500, is up 69%.

Disclosure: Shay regularly trades PTON, CHWY, WMT, TDOC, DOCU, ZM, and AMZN. 

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