Banks shined on Monday, rallying 1.6 percent. And traders are now finding reasons for those stocks to really pick up steam.
"These guys still look good from both a valuation perspective and earnings growth," said Erin Gibbs, equity chief investment officer at S&P Capital IQ. "What we're really seeing are lower legal costs, higher quality of loans, lower loan costs, and that is really pushing their earnings up this year and they're still trading at very attractive prices."
Simply put, Gibbs finds the stocks to be attractively priced.
"The banks industry is at about 11.5 times forward earnings, versus 17.5 for the index. But for growth in Q1, they're looking at about 25 percent growth for Q1 versus 3 for the S&P 500. So some big differences, definitely some big positives," she said.
But with the banks having a tough year thus far, falling nearly 4 percent even with Tuesday's rally, which one looks the best right now?
The financials present "a case of a strong fundamental story that needs to show us. And a stock that could lead us out is JPMorgan," he said
Gordon says that if the stock breaks above $62, it would emerge from its recent range, and present an attractive opportunity for traders to get long.
With Monday's surge, that's just $1.04 above JPMorgan's current levels.