New love for the ‘most-hated sector’

There are better places to put money to work than consumer-related stocks, Bank of America Merrill Lynch Head Of U.S. Equity & Quantitative Strategy Savita Subramanian said Wednesday.

"Energy is one of the most-hated sectors," she said. "In fact, one reason that we love it is that it is the most underweighted sector in the average mutual fund's portfolio. So, it's another sector that benefits from an economic recovery. It's done nothing for a while, or it's done bad things for a while. So, I think it's time to start thinking about these sectors that could be better cyclical bang for your buck than the consumer sector, which is already expensive, trading at peak margins, starting to miss on earnings.

"I mean, things are not looking great for the consumer sectors."

(Read more: Dow logs 6-day losing streak to close below 15,000 after Fed minutes)

On CNBC's "Fast Money," Subramanian, who raised her S&P 500 year-end price target from 1,600 to 1,750 in July, said that stocks still had room to run.

"We're not changing our target," she said. "Five percent sell-offs happen pretty frequently in a year. We haven't had one in a long time. It's felt like we were getting to a point where the market was complacent. So, I don't see this as that big a deal. No reason to change our target. In fact, I think that if anything, this should be used as a buying opportunity for equities."

(Read more: Correction could top 5 percent: Byron Wien)

Subramanian downgraded consumer discretionary, telecom and utilities.

Rising rates, she added, wouldn't kill the housing rally but would slow it.

(Read more: Buy European banks for big returns: Top fund manager)

"I don't think we get downside risk to the consumer, but I think there are better places to get your cyclical exposure," Subramanian said.

And as interest rates appeared increasingly likely to rise, one sector has outperformed.

"Tech has come back from the dead," Subramanian said. "Some of these stocks that have really lagged for quite a while have started to outperform."

(Read more: Boosts ahead for Apple stock: UBS's Steve Milunovich)

Subramanian called technology the best performing sector in tightening cycles.

Rounding out her top three sector picks were energy and industrials.

By CNBC's Bruno J. Navarro. Follow him on Twitter @Bruno_J_Navarro.

— CNBC's Michael Newberg contributed research to this report. Follow him on Twitter: @MikeNewberg.

Trader disclosure: On Aug. 21, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Jon is long AAPL; Jon is long GLD ; Jon is long FB; Jon is long UVXY; Jon is long NOAN; Karen is long AAPL; Karen is long BAC; Karen is long C; Karen is long JPM; Karen is long TGT; Karen is long GOOG; Karen is long SPY; Karen is long MDY; Karen is long FL; Karen is long M; Karen is long NADL; Tim is long BAC; Tim is long INTC; Tim is long SBUX; Tim is long MSFT; Brian is long CANADIAN DOLLAR.