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These stocks are poised to win big from the trade war, two experts say

These 3 stocks are poised to win big from the trade war, experts say

If you're trading the trade war, two counterintuitive plays could be your ticket to profits, says one market expert.

After sources said Tuesday that the Trump administration would delay placing tariffs on auto imports for up to six months, Mark Newton of Newton Advisors set his sights on two stocks that he thinks are poised to win despite their involvement in global trade: Ford and U.S. Steel.

Turning to a long-term chart of Ford, which has rallied more than 35% in 2019, Newton said the stock has been getting closer and closer to reversing its five-year downtrend, building a "bullish base" as trading volume picks up.

"I like the stock. I think that, really, any move over $12 would help to break this downtrend," Newton said Tuesday on CNBC's "Trading Nation." "Who knows what will happen, but a potential delay in the tariffs very well could lead these auto stocks back higher."

For was trading at $10.33 per share in Thursday's premarket.

As for U.S. Steel, which is down nearly 18% year to date, rising trade tensions between the U.S. and other global economies should play to its stock's favor, Newton said. The Trump administration enacted tariffs on steel and aluminum from Canada, Mexico and the European Union last May.

"The steel stocks ... have been beaten up very badly in recent years," Newton said. "U.S. Steel traded back as high as $47 only last March and is down over 60% since that time. So, in my opinion, it's more of a case of sell the rumor and buy the news, and these stocks have pulled back to levels that I think are increasingly very important."

He pointed out that the stock recently returned to its lows from 2009, having bottomed several times in the $14 to $16 range in recent years. More importantly, monthly volume trends show the stock nearing oversold levels, typically a bullish signal.

"My thinking is it's attractive from a risk-reward perspective," he said. "This looks really interesting at a time when everybody's searching for tech stocks, and that sector's been increasingly volatile, and here's a stock that's down over 60% that looks increasingly like this could be a winner."

Mark Tepper, president and CEO of Strategic Wealth Partners, said he would steer clear of stocks like Ford and General Motors despite what he saw as a positive development in their sales strategy: an increased focus on high-demand, high-margin SUVs and trucks.

"We'd be sticking with the auto parts retailers like O'Reilly," he said in the same "Trading Nation" interview. "Quite frankly, more and more people are going to be opting to fix and repair their current cars rather than go out and buy new ones, and that's just what happens when the economy slows down. So, don't fight the cyclical trend. The average vehicle on the road right now has never been older. It's 11 years old. And those cars need to be fixed."

Tepper preferred O'Reilly to its peers because of what he saw as best-in-class inventory management, a compelling valuation and "a track record of stellar performance whenever the economy slows or contracts."

"If you go back to July of '07 through July of '09, the S&P was down about 38% or so over the course of that time frame; O'Reilly was actually up 4%," he noted. So it is a good stock to hold late cycle."

Shares of Ford gained more than 1% in Wednesday's trading session following the auto tariff delay. U.S. Steel's stock declined by less than 1%. O'Reilly shares were largely flat and are up less than 3% for the year.