This sector is a 'win-win' trade: Technician

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As stocks near record levels yet again, some traders are asking an important, if not obvious question: When will join the rally?

While the energy, and consumer discretionary sectors are up a respective 7, 6, and 3 percent this year, financials are down 1 percent despite strong performances from marquee names like Goldman Sachs and JPMorgan. But according to one top technician, that underperformance represents a "win, win" opportunity.

In an interview with CNBC's "Options Action," chief market technician at Cornerstone Macro Carter Worth said the financials are nearing an "inflection point" that could make the sector the "place to be." Worth bases his thesis in part on the charts, which he says are forming a multiyear "wedge" pattern that should resolve itself in a "meaningful" move higher. Technicians often look to wedge patterns for clues on when a stock could make a big move higher.

"What we are thinking here is this direction is going to be up, based on the way certain banks are acting," Worth said Friday.

Beyond the charts, Worth says that the changing leadership in the stock market should also help the financials as well.

"The two things that have led this year, consumer discretion and health care, have come in quite a bit," Worth said. "In order to be a leader, you must be in a clear uptrend. It will take something like the financials to get the market going."

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Stocks are at record levels, but the recent leadership composition has changed; sectors like health care and consumer discretionary, which had led the market higher for years, have underperformed the last couple months. Meanwhile, energy stocks, which had badly lagged the market as crude collapsed, have recently surged with the comeback in oil prices. But financials, which remain the second largest sector behind technology, have yet to join the party.

"How much higher can the market go without participation from the second largest sector in the S&P?" asked Worth.

By Worth's reasoning, the banks are almost in a can't lose situation; if the market goes higher, they are likely to rally, and if the rally stalls, the banks' low multiple should attract value investors.

Said Worth, "It's a heads you win, tails you wins trade."