Chevron is starting the week fresh on the heels of its worst day in more than a year.
The major oil company tumbled 5% on Friday in its biggest one-day drop since February 2018 after announcing a $33 billion deal to buy Anadarko Petroleum. Occidental Petroleum also reportedly is interested in the oil and gas exploration company.
While Chevron dropped on the deal, Joule Financial founder Quint Tatro sees opportunity in its weakness.
"Even though the group as a whole seems to be getting a boost, obviously Chevron, the buyer, is not," Tatro said on CNBC's "Trading Nation " on Friday. "You've got to look at a name like this that is trading 14 to 15 times forward earnings. … Obviously they're spending $30 billion to try to grow that profit, so we like the acquisition."
Chevron is expected to post a 2019 earnings contraction of 14 percent, followed by a 23 percent surge in 2020, according to FactSet.
"We need to do a lot more work really into the fundamentals to see how this will be accretive to the bottom line," said Tatro. "Basically it expands their shale play, their deep-water drilling, so it's hard to do but ultimately I think this is a day where you've got to hold your nose and you go in and you add to your Chevron position."
Tatro also likes Chevron for its strong balance sheet and steady dividend. The company yields 4%, double the S&P 500.
Craig Johnson, chief market technician at Piper Jaffray, is more conservative on the energy group as a whole.
The XLE energy ETF "still is at a point where we need to get above about $68. That's where your 200-day moving average is at, which is declining," Johnson said Friday on "Trading Nation." "There's still a long way to go. Again, I like energy, but I'm more of a neutral to these names. Is the M&A activity going to put a little bit of a bid under these names? It probably will, but I'd rather be a selective buyer of these names, especially the XLE."
The XLE ETF has not traded above its 200-day moving average since October. It has fallen 7% since then.
Disclosure: Joule Financial holds CVX.