The best way to play uncertainty in the Energy sector could be pair trading, according to Oppenheimer technical analyst Ari Wald.

“Our top-down process stresses buying the best of the best and selling the worst of the worst, and we accordingly still recommend an Overweight position in US large-caps from a global equity allocation viewpoint,” Wald advises.

Although Oppenheimer still sees U.S. stocks as “the best house in a bad neighborhood,” not all U.S. sectors are created equal. The firm is bullish on the Technology and Consumer Staples sectors and names Financials and Energy as the worst two sectors.

However, Wald does have varying outlooks for Energy subsectors, and recommends that investors buy Integrated Oil stocks and sell struggling Drilling stocks.

While Wald acknowledges that the Energy sector could be in the process of finding an absolute bottom for this downturn, it continues…

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