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Sector Plays: Where the Bulls Run

Phil Orlando of Federated Investors has bad news and good news; based on that, he identifies sectors where he believes stock buyers should be putting their money. Jerry Castellini of CastleArk Management thinks all that needs to happen is for government bailout grants to kick in.

"The bad news is that we're in the middle of the longest and deepest postwar recession in history," Orlando told CNBC. "The good news is, we think that investors are now starting to look across the valley, and begin to discount the economic upturn that we think may start in the middle of next year."

Castellini says the situation looks a lot worse than it actually is.

"We're seeing a big liquidation of intermediary inventories in the world economy," he explained. "Everything that can raise some working capital is doing so because of that, but that gives you the appearance of a much worse recession than the one we're actually in."

Recommendations:

Based on that good news, Orlando recommends investor dollars go into health care, consumer staples, technology, and energy. Instead of consumer staples, Castellini recommends industrials.

"Parts of the industrial economy have been slowing for some time now," Castellini explained. "It looks like things are in a free fall, but that process will be done very quickly."

Orlando calls energy and technology stocks "beta plays."

"We think energy stocks and technology stocks are well positioned, and extraordinarily attractive from a valuation standpoint, and we think they are a pretty good opportunity here," he said.

Disclosures:

Disclosure information was not available for Orlando, Castellini or for their companies.

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