As stocks kicked off the week with major gains, the S&P 500 energy sector was one of the best performers on Monday, rising almost 3 percent.
And according to one market strategist, a rally in energy stocks is already underway.
"I believe a reversal's already been made," Neil Azous of Rareview Macro said Monday on CNBC's "Power Lunch." "There are enough indicators out there that suggest the time has come."
Specifically, Azous said the price of oil has shown stabilization between the first trading sessions of August and October, both days in which crude oil closed at about $45 a barrel.
Another sign of a bottom, Azous said, is the fact that large-cap energy stocks have fallen 40 percent, both on an absolute basis as well as relative to the S&P 500. Meanwhile, small-cap energy stocks have dropped 60 percent on an absolute basis and relative to the Russell 2000 small-cap index.
"You have to go back a very far time in history to find any other sector that really came close to that," Azous said.
Oil drilling rigs have also declined significantly, he pointed out. The latest Baker Hughes rig count reported 809 rigs in the U.S., lower than the previous week and down 58 percent from one year ago.
However, Oppenheimer's head of technical analysis, Ari Wald, said the bottom for energy isn't in just yet.
"This is giving traders a little bit of comfort in trading up shares of the sector. However this is a counter trend move," Wald said Monday.
The energy sector ETF (XLE) is still following a downtrend of its 200-day moving average, Wald said. Instead of betting on a long-term rally, Wald suggests selling XLE at resistance around the $70-$72 range.