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This sector is set to rally: Technician

Utilities went from being the best-performing sector in 2014, to the worst-performing sector so far in 2015. But according to one technician's chart work, the space is setting up for a strong bounce.

"The utilities are a great way to take advantage of today's low interest rates," said Evercore ISI's head of technical analysis, Rich Ross, on Tuesday's "Trading Nation." Much of the past year's outperformance in the utilities has been driven by low Treasury yields. And Ross is looking at the pullback in the PHLX Utility Sector ETF, ticker symbol UTY, for opportunity to buy.

"The first thing we see when we break down the chart is this really strong uptrend over the last 12 months. Now importantly, we also see a really sharp pullback here, down 14 percent from recent highs," said Ross. "What I think, is that this has created a compelling buying opportunity."

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Ross noted that the pullback in the UTY has brought the ETF right to critical support levels at the 200-day moving average and prior resistance. "Technical analysis teaches us that prior resistance becomes new support on a pullback, and that's exactly what's happened here with the utilities."

A combination of the recent pullback, strong support and low interest rates, "makes the utilities a buy at current levels," said Ross.

He is targeting a move to $610 per share in the UTY, roughly 7 percent higher than current levels.

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