Financials just hit its highest level in over a decade, and Rich Ross of Evercore ISI has one surging name to buy.
As the markets soared to record highs on Wednesday, the financial sector hit its highest level since Oct. 30, 2007. The move higher follows comments Tuesday by Jerome Powell, incoming Federal Reserve chairman, on potentially lessening regulation on banks, putting the group on pace for its best weekly performance in a year. According to Ross, the rally is far from over.
"A huge day for the markets on Tuesday, and an even bigger day for the big banks. I'm going to show you why we go higher and pick one stock for you to buy right now," Ross said Tuesday on CNBC's "Trading Nation."
"Look at this big trading range, moving sideways for most of the year. Yes, you're keeping pace with the market, but outside of this big surge we saw coming out of the election, financials have been very range bound. ... it's been somewhat of a frustrating ride along the way," Ross explained.
Ross' chart work suggests the XLF has broken out of the trading range and shows promise of continuing the move higher. "We tested and held the 50-day moving average, and I think [Tuesday's] outsized move set the stage for an extension of that advance."
The biggest banks in the sector have seen parabolic moves this week. Bank of America shares have jumped 7 percent, JPMorgan has soared 6 percent, and Citi and Wells Fargo are both up 5 percent. For Ross, JPMorgan is a top pick in the space.
Looking at a long-term chart of the bank, Ross illustrated that there was a huge base of support that formed on the chart. "This bigger structural base of support provides the launch pad for a short- to intermediate-term move up," Ross said.
The stock has broken out of that large base of support and has formed a bull-flag pattern recently, according to Ross. "The impulsive move [higher] takes the form of one of my favorite continuation patterns – the bull flag." Bull-flag patterns are often looked at by technicians as a bullish sign of a continued uptrend.
"I think the stock can get to $120," Ross added.
JPMorgan shares hit an all-time high of $104.22 during Wednesday's trading session.