Don't buy this dip in energy: 'Fast Money' trader

The energy sector selloff isn't a dip investors should look to buy, OptionMonster's Pete Najarian said Tuesday.

Stocks ended a three-day decline—its worst since 2011—while crude oil prices hit a two-year low, sending the Energy Select Sector SPDR exchange-traded fund to 52-week lows.

Najarian said that while some investors were wondering whether it was time to buy, he did not.

"I don't see a reason yet," he said. "I think until we see the flush, I think you stay away from the energy names."

Read MoreDon't dump these beaten-up stocks: Value investor

Source: Vildana Hajric | CNBC

On CNBC's "Fast Money," Najarian said that was especially the case in companies with exposure to shale fracking.

"I am not seeing people come out and saying, 'You know what? Now's the time to pounce on these names," he said. "They've been beaten down 10, 12, 15 percent … and they finally are saying, 'This is the time. Let's jump into these names.' We're seeing it in other spots. We're not seeing it in any of these energy names."

Najarian called the energy a drag on the broader market.

"That's what dragged down the S&P," he said. "It wasn't any individual names that we were talking about, that we like in different parts of the market. It was the energy space, again, that pulled us down."

Read More Crude settles down 4.6%, lowest since June 2012

Crude oil futures closed down 4.6 percent at $81.84 per barrel, its lowest price since June 28, 2012, according to Reuters.

Triogem Asset Management's Tim Seymour said the decline in oil prices forced more players out of the trade as losses mounted .

"If you look at $81.75, this is exactly the level on crude that a lot of people were watching," he said. "We got down there. We killed that."

Seymour said the crude oil trade was healthy.

"I think we got very good action in the OIH, the XLE—any of these names that are trading the oil space—because the stocks don't have to defend the oil price," he said. "I actually think this is actually a fair level to own oil."