Trading Nation

Nike and JP Morgan are two Dow stocks to buy on the recent rebound

Four Dow stocks making a major comeback

As the broad markets try to make a comeback, a handful of Dow stocks have reclaimed their precorrection highs, and the charts are pointing to even bigger gains for two names in particular.

Cisco, Nike, Boeing and J.P. Morgan all took hits when the market topped out on Jan. 26 but have since erased those losses and are trading at or near their prior highs. founder Todd Gordon says the charts are aligned for J.P. Morgan and Nike.

Money in the bank

On a five-year chart of J.P. Morgan, Gordon points out that the bank has seen a "long, beautiful base."

Additionally, on a one-year chart of J.P. Morgan, Gordon points out that the recent rally has actually taken the stock back up to a key resistance level from which it could break out. Both charts have Gordon believing that J.P. Morgan is set for an even bigger rally.

"In this period of increasing interest rates [there is this] fear: Can the stock market, the bull market sustain higher yields? Well according to the financials, perhaps it can," he said Wednesday on CNBC's "Trading Nation."

On a fundamental basis, Strategic Wealth Partners CEO Mark Tepper agreed J.P. Morgan is a prime buy right now, given the current interest rate trends.

"J.P. Morgan is our favorite of the banks," said Tepper. "When we talk about [the group] in general, they're going to benefit from the rising rate environment, they're going to benefit from tax reform," he said.

J.P. Morgan shares are up more than 8 percent this year, making it one of the best performing Dow stocks.

Racing higher

Gordon said Nike's stock looks poised to meet the upper end of a channel that has actually been in place since 1999.

The upper end of the channel sits at around $75, leading Gordon to believe that Nike could surge 11 percent more. The stock is already up roughly 8 percent this year.

Tepper agreed Nike could outshine its competitors, given the company's "triple double" strategy. Under the strategy, the athletic shoe company has commited to double its product innovation and manufacturing speed and to strengthen its direct connection to consumers.

"They're really focusing on e-commerce growth, and you can see that through their recent partnership with Amazon [and how they have begun to sell] directly to consumers on Instagram," he said on "Trading Nation." "So margins have been under pressure the past few years, but their improved manufacturing process should lead to margin expansion, which obviously is a positive."

This, according to Tepper, should allow Nike to compete with other big brands like Adidas and Under Armour.