Rising rates are shaking the market to its core as bond yields held at their highest level in seven years, but an unexpected group of winners is emerging.
Bond proxies, often victim to rising rates, have held up surprisingly well. Sectors like consumer staples, utilities and real estate have been outperforming the broader market. And the biggest blue chip high-dividend stocks like Verizon, IBM, Exxon Mobil and Procter & Gamble are all in the green over the past three months.
One of those names looks primed for a breakout, said JC O'Hara, chief market technician at MKM Partners.
"One of our favorite charts is the chart of Verizon," O'Hara said Tuesday on CNBC's "Trading Nation." "If we look at the recent price performance, we saw a bearish-to-bullish reversal here and to us that shows us that the bulls are back engaged in the stock."
Dow stock Verizon tumbled 25 percent from its peak in mid-2016 to a trough in mid-2017. Its downward trend reversed itself from that July 2017 bottom and it has since rallied back to those 2016 highs, a gain of 30 percent.
On a total return basis, Verizon has also broken out above a key resistance level stretching back to those highs more than two years ago, said O'Hara.
"If you look at the total return, you actually see that bearish-to-bullish reversal, we saw the price broke out," said O'Hara. "We have a great chart that's breaking to new highs. That's something that we like."
Verizon broke above its 2016 peak on a total return basis earlier this year.
Verizon also finds a fan in Boris Schlossberg, managing director of FX strategy at BK Asset Management.
"Verizon is my favorite name among all those high yielders for a completely different reason — because of 5G," Schlossberg said Tuesday on "Trading Nation." The next generation of wireless networks, 5G, "could upend markets in gaming and broadcasting and Verizon is going to be the first player in that space."
The other buy in the group, according to Schlossberg, is Exxon Mobil, another Dow stock he likes for its high dividend. He says the oil company should ride the energy wave as crude prices hold above more than $70 a barrel.
Verizon has a dividend yield of 4.4 percent, while Exxon Mobil yields 3.8 percent.