On Friday the price of crude continued to rally, trading above $99, before paring some gains.
The recent increase has energy bulls looking to establish new long positions, but if you're one of them, going long the XLE may not be the best play, according to pro trader Steve Grasso.
”Look at it this way,” he says. “Higher oil has money flowing into oil services companies. If you're looking for a play, I’d look at those stocks. Halliburton and Baker Hughes are my favorites.”
And if you’re more aggressive, Grasso suggests smaller companies that have moved in the wake of Superior Energy’s deal to takeover Complete Production Services.
”Key Energy , Basic Energy , and C&J Energy – all of those names have run. I’m personally long BAS and KEG and I added on the dip,” he says.
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CNBC.com with wires.