Materials sector breaks out to records — watch these two stocks, Piper Sandler says
Stocks are taking a breather after last week's highs, but one sector is breaking out.

The materials sector was the only S&P 500 slice at record highs on Thursday and was tracking for a sixth weekly gain in a row, its best streak since May.

These stocks are likely beneficiaries of the $1.2 trillion infrastructure package passed by Congress and set to be signed by President Joe Biden on Monday.

"The market response has certainly been really positive. There's good momentum behind the material sector and, in fact, just this week we upgraded the sector from a relative strength perspective to overweight versus the S&P 500," Katie Stockton, founder of Fairlead Strategies, told CNBC's "Trading Nation" on Thursday.

These fresh records present broad-based strength in the group that should lead to more gains to come, added Stockton.

"That's really newly positive momentum from an intermediate-term perspective. It's been positive from a short-term perspective with the broader market, of course, for a few weeks now, but the reaching of new highs, that essentially removes resistance from the charts and makes for a path of least resistance going higher," she said.

Craig Johnson, chief market technician at Piper Sandler, agreed with Stockton that this breakout suggests a bullish longer-term setup. He highlighted two names within the group as examples of this strength.

"Take a look at the charts of stocks such as ECL , which is Ecolab, they continue to look constructive, and you're just sort of breaking out of a very nice-looking ascending triangle at this point in time," Johnson said during the same interview.