This top banking stock could be the best way to play the financials rally

This top banking stock could be best way to play the financials rally

Financials have led the stock market rally over the past three months, marching back toward highs not seen since 2007.

A lagging name could be the best way to play catch-up, according to Miller Tabak equity strategist Matt Maley.

"Goldman Sachs — not only has the stock underperformed the broad market by quite a bit this year but it's also underperformed the XLF [financial ETF]," Maley told CNBC's "Trading Nation" on Monday.

Goldman Sachs shares are up 8% in the past three months, weaker than the 11% advance on the XLF ETF and a similar move on the KBE bank ETF. However, the stock has bounced more than 20% from a summer low.

"It could have a lot more upside if it can break even further," Maley said. "The stock has already broken above its trend line going back to last year, its one-year trend line, that's very positive. Now it's bumping up against its highs that came in at $222."

"If it could break above the $222 level in any kind of meaningful way, that would follow that broken trendline with a higher high, so that would be very, very bullish," Maley said. "That $222 level is also the topline of an ascending triangle pattern, so for two different reasons on a technical basis, if it can break above $222, it's going to be incredibly bullish for the stock."

Goldman Sachs is just over 1% from reaching $222. It touched that level earlier this month.

John Petrides, portfolio manager at Tocqueville Asset Management, is bullish on the big banks as a group.

"There's value in the larger-cap money center banks. What have we learned over the past couple of weeks? The Fed has cut rates twice, and yet this group has rallied, and why is that? Well, I think they've diversified their business model enough where they're not as sensitive to where interest rates were, say, maybe 10 or 20 years ago," Petrides said during the same segment.

The XLF ETF, which holds J.P. Morgan and Bank of America among its top components, has moved 4% higher this month. The broad-based S&P 500 has increased less than 3%.

"They've diversified into wealth management and trading and other forms of revenue streams that can help their overall model grow, and they've by and large beat analysts' expectations," Petrides added. "Given where valuations are, I do think the large-money centers are attractive here today."