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One U.S. bank is best bet to play European financials rebound, Oppenheimer says

VIDEO3:0103:01
This one U.S. bank is best play for European financials revival, Oppenheimer bets

Deutsche Bank's massive restructuring plans shook the European banks to begin the week.

The German lender announced plans on Monday to cut 18,000 jobs through to 2022, just one leg of major turnaround efforts. Deutsche Bank fell by more than 5% on Monday, while fellow European banks including UBS, HSBC, Credit Suisse, Barclays and Banco Santander slid.

Now one technician sees a rebound in the making for the beaten-down group.

"The European STOXX bank index is that the industry has come into a test of decade-long support dating back to 2009. Now this is the level that stirred turnarounds in the industry in both 2012 and then again in 2016," Ari Wald, head of technical analysis at Oppenheimer, told CNBC's "Trading Nation " on Monday. "Just how deeply oversold interest rates have become offers that dry powder as well."

Investing directly in the European banks isn't the best way to play any revival, says Wald. Instead, he sees a major bank stateside as offering the best opportunity.

"Stick with the higher-quality U.S. banks like J.P. Morgan that score higher in our momentum work, " Wald said. "If European banks do get that turnaround, I think J.P. Morgan breaks through $119 resistance which would be a very big breakout. If the turnaround doesn't play out, I see less downside risk as well so much better risk-reward to stay in the U.S. than that group."

Boris Schlossberg, managing director of FX strategy at BK Asset Management, says European financials as a whole could have more pain ahead.

"It's a very tough business now when you have negative rates and a slowing economy. I just can't imagine that the European banks are really going to be in good shape and it's not a sector I really want to invest in," said Schlossberg during the same segment.

However, there's one name for which Schlossberg makes an exception.

"UBS, I think with $2 trillion in assets and a very diversified base, is an interesting look and a 5.7% dividend yield makes it very attractive, " he said. "Plus you add to that one interesting thing – I think the dollar goes stronger against the Swiss franc. That's going to help the UBS stock."

The U.S. dollar has risen nearly 2% against the Swiss franc so far this month.

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