JPMorgan is the one surging bank stock you should own

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.


Trades to Watch

Trader Bios


Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's Closing Bell (M-F, 3PM-5PM ET). In addition, he contributes to CNBC and CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

Read more