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CNBC PRO Talks

Top chart analyst Chris Verrone reveals his No. 1 buy signal, other tips

Technical analyst Chris Verrone joined CNBC's Mike Santoli for an educational strategy session on how he spots winning investment opportunities using charts.

"We look for examples where securities may be acting differently than the fundamental work might suggest," he said.

As an example, Verrone points to the divergence that occurred last year between interest rates and financials stocks.

"When something doesn't go down when it should, the story or the trend may be changing. I thought last summer was a great example. You had bond yields at record lows, but quickly the banks started to act better. That was a sign to us that a group or security was becoming immune to news that should have hurt it. Banks should've gone lower with lower yields," Verrone said.

In this conversation, Verrone first shares his investment approach and then he uses some of his favorite charts to explain how investors can use technical analysis to their advantage.

Verrone is head of technical analysis at Strategas Research Partners, an independent institutional brokerage firm. He's been ranked among the top technical analysts on Wall Street in the annual All-America Research Survey by Institutional Investor Magazine.

PRO subscribers can also read the entire transcript of the exclusive interview below.