There are still areas of the market with significant upside left, PIMCO CEO and co-CIO Mohammed El-Erian said Thursday.
"I would focus on the following: Investors want to go where the Fed can succeed in its financial repression," he said. "That means the front end of yield curves. That means selling volatility."
On CNBC's "Fast Money," El-Erian, who has $2.04 trillion in assets under management, said that the Federal Reserve's monetary easing would help certain stocks.
(Read more: Stocks to gain another 20 percent: Strategist)
Interest-rate-sensitive sectors were worth a look, he said. "They are going to do better."
"Third, look for companies that still have scope for financial engineering," El-Erian added. "This is a great environment for financial engineering that brings cash to the equity holder, either through buybacks or through higher dividends.
"And finally, don't forget those sectors that were severely dislocated by concerns about the taper. The muni sector, high-quality munis, emerging market bonds, so there's lots of opportunities. But we must remember, and this is really important, the Fed's desire to control outcome doesn't mesh with ability to control outcome, so the scaling of trades is really important here."
El-Erian said that the Fed didn't taper its $85 billion-per-month asset-purchase program for three basic reasons: A tepid economic recovery, continuing high unemployment and the looming debt-ceiling fight in Washington.
"They got really scared when they saw what happened in May and June, and therefore they've become more risk-averse. That's a negative reason for not tapering, not a positive reason," he said. "And secondly, we have a major change in leadership. So, we've got to be conscious of the motivation behind this when you put on the trade.
(Read more: Beyond taper, clear sailing for stocks: David Bianco)
"The real economy is a different issue, but the markets love it."
Trader disclosure: On Sept. 19, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Josh Brown is long AAPL; Josh Brown is long VAW; Joe Terranova is long VRTS; Joe Terranova is long MS; Joe Terranova is long GS; Joe Terranova is long OXY; Joe Terranova is long HOS; Joe Terranova is long HAL; Joe Terranova is long APC; Joe Terranova is long SBUX; Joe Terranova is short LTD; Stephanie Link is long AAPL; Stephanie Link is long JPM; Stephanie Link is long WFC; Stephanie Link is long CSCO; Stephanie Link is long FB; Stephanie Link is long LOW; Stephen Weiss is long LCC; Stephen Weiss is long AAMRQ; Stephen Weiss is long DAL; Stephen Weiss is long C; Stephen Weiss is long THC; Stephen Weiss is long CYH; Stephen Weiss is long AAPL CALLS.