Top Energy Trader Gets Long Baker Hughes

Although nat gas dropped below $2 this week for the first time in a decade, top energy trader Dan Dicker says Baker Hughes is a ‘Buy!’ Huh?

At first glance the trade may seem counter-intuitive, Baker Hughes makes the equipment used to drill for gas and oil. Why would anyone drill for more?

But Dicker says he started buying this stock around $40.

Here's his thesis:

With nat gas so low, “I had thought there would be an enormous drop in rigs being used, not just in the United States but globally."

However the latest data suggests otherwise.

"On Monday when the rig count came out – the rig counts dropped but not that much. 230 globally and here in the United States they’re basically unchanged. (Considering how low nat gas is) That’s absolutely unbelievable."

Dicker believes a renaissance is underway, one in which nat gas begins to be substituted for other forms of energy, because it is so inexpensive.

In addition, Dicker likes BHI for the technicals. He tells us he’s been watching the charts and has spotted bullish patterns. “I think this one is ready to break out,” he says.

Guy Adami also finds the theme tradable, but suggests playing it another way. “I’d look at Albermarle and Huntsman ,” he says. “With nat gas down, input costs for chemical makers are much lower.”

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CNBC.com with wires.