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This is the best stock to play catch-up to the Dow record rally, traders agree

VIDEO4:0804:08
More than one-third of Dow stocks in correction or worse

The Dow Jones Industrial Average just hit a fresh record, but under the hood it's more complicated.

Eleven Dow stocks, or more than a third of its components, are still in a correction or worse – those include Cisco, 3M, Pfizer, Exxon Mobil, Boeing and UnitedHealth among others.

Two traders agree that one of those stocks is the best way to play catch-up.

"The one stock that does look pretty good … is UnitedHealth," Matt Maley, equity strategist at Miller Tabak, said Thursday on CNBC's "Trading Nation." "Here's a stock that had a really tough time over the summer when Sen. Warren started moving up in the polls, but that kind of correlation seems to have gone by the wayside because, as she has stayed up in the polls, the stock has been able to bounce back on a technical basis."

From their peak in July to a trough in early October, UnitedHealth shares fell more than 20%. Since then, they have bounced 21%.

"The stock made a nice double bottom in the very early part of the fall, and now it's rallied up to its one-year trend line. Now it is getting a little overbought on a very short-term basis so it may need to take a little bit of a breather here, but if it can break above that trend line it's certainly going to be very positive for the stock," Maley said.

Mark Tepper, president of Strategic Wealth Partners, adds that broader industry issues that have plagued UnitedHealth could be dissipating.

"All these managed care stocks have underperformed this year because of the possibility of 'Medicare for All' which in our opinion is highly unlikely," Tepper said during the same segment. "These stocks are beginning to act a heck of a lot better, and almost all of them are giving us better-than-expected results on their earnings calls."

However, Tepper prefers a different stock in the managed care space – CVS.

"The reason for that is you're getting the same exact vertically integrated business model that you get with UnitedHealth with the valuations about 33% lower," he said.

Disclosure: Strategic Wealth Partners holds CVS.

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