There's a diamond in the rough among the beaten-down banks that's worth buying, says Evercore ISI technical analyst Rich Ross.
Goldman Sachs is down almost 10 percent this year, but Ross says the charts are indicating that investors should still consider buying the bank even as the stock has retraced almost a third of its gains from Election Day.
"We're going to look at Goldman Sachs as a proxy to the disappointing action in banks, financials and the pullback in yields and reflation more broadly," said Ross Thursday on CNBC's "Trading Nation."
The most important indicator, according to Ross, is the stock chart's 200-day moving average. While Goldman has continued to fall, the stock has still managed to remain above the trend, making the 200-day a "critical support" from which Ross sees a bounce ahead.
"I actually think that with the stock oversold and sitting on key support along with those 10-year yields that this is an interesting opportunity to enter the stock on the long side with a close protective stop around yesterday's lows near $210," Ross said.
"We're a buyer of Goldman Sachs here for a trade on the 18 percent pullback into oversold conditions, with the stock sitting atop key support at that 200-day moving average," he concludes.
Goldman Sachs jumped 2 percent on Thursday as the financials also rallied over 1 percent to turn positive on the year.
