Pro: Here's Why You Should Buy The Financial Sector ETF

Eddy Elfenbein, the editor of the popular Crossing Wall Street blog and Evercore's Rich Ross were guests on CNBC's "Trading Nation" segment and made a strong case for owning the financial sector ETF, the Financial Select Sector SPDR Fund XLF.

Elfenbein was first to make the case. He argued that Monday's trading session represents a "short-term pullback" and stocks will rally in the near-term on higher interest rates. In fact, banks and financial stocks will be outsized winners from rate hikes.

Elfenbein believes the first rate hike is "almost certainly" going to be introduced to the market next week when the Federal Reserve gathers for a policy announcement. He added that another rate hike is also expected to come in six months.

The Technicals

Ross, a technical expert, noted the financial sector ETF is forming a "bullish flag formation" which suggests a rally is forthcoming. The technician emphasized that financial stocks are still the "bedrock of the post-election reflationary rally" and the pro believes the ETF can trade as high as $28 per share, which would eclipse its prior 52-week high of $25.30.

Ross also highlighted a similar flag forming on the 10-year Treasury yield chart, which is also set to break above the resistance level of around 2.5 percent and will ultimately settle north of 3 percent, which also supports a bullish cash for the financial sector.

See Also:

One Of The Top Ranked Financial Advisers Thinks Stocks Can Rise 50% - But Don't Call It A 'Trump Rally'