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The energy sector has been “an absolute disaster” and oil is “probably going to $47,” The Bensignor Group CEO Rick Bensignor told viewers of Real Vision’s Trade Ideas.
The other side of that bearish outlook is that there is a continued move towards clean energy. “More and more companies are investing on that side and reducing their infrastructure and capital expenditure on the traditional side,” he said.
The Trade
Bensignor likes the Invesco WilderHill Clean Energy Portfolio ETF (PBW), which is based on the WilderHill Clean Energy Index. The ETF is trading at less than a third of its all-time high of $144, and Bensignor believes it could double in the next few years.
He likes buying PBW at current levels with a short-term target of $34.75 by the end of the year, and a stop loss of $27.70.
The biggest potential risk to the trade is if a recessionary environment closes in between now and the end of the year, resulting in companies halting their technology expenditures.
However, he added: “I think there’s build up and it’s going to keep coming and coming for the clean side of energy.”
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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