Regional banks are soaring. Here are two names you can still buy

Regional banks are on the rise.

Shares of the KRE regional bank has gained more than 16 percent this year, outperforming the S&P 500 and broader financials.

The regional banks ETF jumped on Thursday after SunTrust and BB&T announced a $66 billion merger – the largest bank deal since the Great Recession.

Mark Tepper, founder of Strategic Wealth Partners, notes that while a flattening yield curve and historically low interest rates are a headwind for financials, the beginning of bank regulation rollbacks could spark even more M&A activity in the space.

"The new regulation breaks banks down into five different categories according to their asset levels, and the regional banks of assets between $100 billion and $250 billion have less strict regulations than the bigger banks with let's say over $700 billion," Tepper said Thursday on CNBC's "Trading Nation."

Tepper added that before the merger announcement, the market value of both BB&T and SunTrust was already nearing the big bank threshold and together they now have access to "greater scale, great cost efficiency [and] better geographical reach."

For investors looking to play individual names in the regional banks, Tepper suggests Keybanc for a move to the upside.

"For all of its issues [Keybanc is] way too cheap. It's trading at a significant peg discount to other regional banks," he said. "They've also done really well with regards to improving their credit quality, which is really important at this stage of the economic cycle. So we would like Key here."

On a technical basis Todd Gordon, founder of TradingAnalysis.com, recommends Utah-based Zions Bancorp for a way to play the rally. Shares of Zions are up more than 21 percent this year, and while Gordon likes the stock, he illustrated that there is overhead resistance.

"There's some resistance right about [the 200-day moving average], and if we can break through this hold into the 50 to 52 mark, we could be moving up into Zion.

Gordon notes that while regional banks have had a stronger performance relative to the broader financials group, they still remain below the longer-term trend.

"Stronger sectors have broken above this 200-day moving average or tested it, so we still have some underperformance," he said. "There's a lot of wood to chop if these financials are going to get out of their own way and start to join the broader rally."

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