Connect with us

Energy Sector

This 1 Energy Stock Could Be Your Best Bet To Play The Comeback In Oil

This 1 Energy Stock Could Be Your Best Bet To Play The Comeback In Oil

This energy stock might be the smartest play in the energy sector now.

Energy stocks have struggled in 2019 and have been the worst-performing sector in the S&P 500 this year.

But now they are on the move, and there’s one stock in particular is a great way to play the trend. 

Despite a drop in oil prices, energy stocks were holding a 1% gain early this week. And Oppenheimer technical analyst Ari Wald says the sector has bounced from a “very deep oversold condition,” though it’s too early to say if “this is a sea change for the sector.”

“Energy’s relative trend… has been in this steady progression of lower highs and lower lows over a number of years, but I think there is a little bit of juice left here just simply based on our view of the market,” Wald said to CNBC.

But this latest uptrend in energy’s most beaten-down names is “very bullish” for investors and should lead to higher prices for the whole sector, according to Wald.

“I just want to be selective within energy,” Wald cautioned. “The midstreams really screen positively for us for exposure to this sector.”

Wald’s favorite stock in the sector is midstream energy company OneOk (NYSE: OKE), which is known in particular for transporting natural gas liquids throughout the U.S. 

So far this year, shares are up 37%, thanks in part to investors looking for yield being attracted by OneOk’s 4.84% dividend yield.

Right now, OKE is “breaking through five-year resistance dating back to 2014,” Wald said, noting that it’s “tough to find another energy stock that has that type of profile. Here’s a leading energy company that is participating as the laggards bounce as well. That’s how we want to play. That’s a top idea for exposure, OneOk.”

Source: TradingView.

More in Energy Sector

Read This Next

To Top