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Top chart analyst: Dividend stocks look fantastic

Jeff deGraaf, chairman and head technical analyst for Renaissance Macro Research, believes the bottom in yields is not in yet, so investors shouldn't sell their dividend stocks just yet.

"I think you go with the bond surrogates," said deGraaf, in response to whether investors should consider rotating into cyclical stocks given the year-to-date rally in yield plays.

Since the Brexit vote, the strategist explains that sectors like utilities, telecom, staples and REITs have all consolidated and continue to look "fantastic right here."

This year, both telecom and utilities are the top performing sectors in the S&P 500, up more than 15 percent.

"I think we are going to go back to, at least more than people anticipate, to this bond surrogate trade," the strategist said, forecasting that bond yields are likely to head lower; therefore increasing the appeal of high-yielding equities.

DeGraaf is the best chart analyst on Wall Street over the last decade, according to Institutional Investor magazine. He was formerly the head of the investment policy committee at ISI Group. ()

In this panel discussion, other CNBC contributors like Stephanie Link and Guy Adami share their thoughts on valuations for these groups along with their investment strategy.

Only PRO subscribers have access to the full, lengthy interview, which was originally broadcast on "Closing Bell."