Why one technician is buying the banks ‘for the first time all year’

Financials hit their highest level since 2007 last Friday, a milestone that has one technician feeling optimistic about the sector for the first time this year.

The group has quietly been on a tear in the last three months, with the Financial Select Sector SPDR Fund (XLF) surging more than 6 percent and – and for Carter Worth, who previously called the sector "a disaster," something has changed in the charts.

"We just stuck our head up above [resistance], we just got a breakout," Worth said Friday on CNBC's "Options Action."

Financials were the hottest sector immediately after the election, but quickly settled into a range this year. Worth pointed out that despite breaking out above early March levels, the category has still shown very little activity one way or another, creating what Worth sees as a point of "tension" that could make or break this sector.

"We have made no progress as the market has made a lot of progress," Worth said. "That is either the opportunity or the trap. I think, for the first time in months, it is an opportunity and I want to be long financials for the first time all year."

Financials were slightly lower Monday afternoon.

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Host Bio

  • Melissa Lee

    Melissa Lee is the host of CNBC's “Fast Money” and “Options Action.”

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