Why transportation stocks will power higher: Pro

Transports to rally higher? Pro says yes

Transportation stocks have been riding high lately thanks largely to falling oil prices, and one market pro thinks they have more room to run.

The Dow Jones transportation average is up about 23 percent this year and is outperforming the broader market since a pullback in mid-October. Cheaper gas prices means companies have been able to rein in fuel costs and consumers have had more to spend on merchandise that needs to be shipped.

Jack Bouroudjian, CIO of Index Financial, told CNBC he expects the transports will continue to power higher thanks to the pro-growth policies of the incoming GOP-controlled Congress.

"It's not a coincidence that the oil prices started to drop as soon as it was inevitable that the Republicans were going to start taking control of Congress," Bouroudjian, also a CNBC contributor, said in an interview with "Power Lunch."

"We can talk about the Saudis slashing prices. We can talk about everything else. But you have had an Obama premium in energy prices over the course of the last five to six years and I think that is what we're seeing taken out of the market."

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A Canadian National Railway locomotive pulls a line of cars through the Macmillan Yard in Vaughan, Ontario, Canada.
Norm Betts |Bloomberg | Getty Images

On Thursday, hit a four-year low and U.S. light crude hit a three-year low.

Cheap oil is one reason Bouroudjian is also bullish on the overall market for the rest of the year.

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"These last couple months of the year is when we are going to see the chasing of returns and guess what lower energy prices are only to help that and add fuel to the fire," he noted.

However, Jeff Kilburg, founder and CEO of KKM Financial, is much more cautious.

"We're in the midst of a crash up. We have seen such an emotional market here. We've seen in the last 15 days about a 13 percent gain and that's not sustainable," he said.

"On the horizon there is nothing too alarming but that's when complacency creeps in. So you have to really be careful here."

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—CNBC's Morgan Brennan contributed to this report.