Equities markets rallied on the news and Mark Newton, chief market technician at Greywolf Equities, told TheStreet's Debra Borchardt that now is the time to buy energy. While WTI crude and brent crude are lower in Monday's trading session, they are off the lows, Newton pointed out.
He added that WTI crude has been trying to stabilize in the $92 to $95 region, while brent crude has actually been performing pretty well over the past several weeks. Despite the weakness, Newton says it might be time for investors to step in and buy energy names ahead of the winter season.
Aside from entering a historically strong season for energy prices, the pullback from September highs has created a solid buying opportunity.
Newton also said the deal with Iran is just for six months, which is only a temporary fix and there is a lot of skepticism that the deal will even be completed.
He concluded that energy stocks look good from a technical point of view and have a better risk-to-reward setup than sectors such as industrials and consumer discretionary, which have already made moves to the upside and are starting to stall out.
-- Written by Bret Kenwell in Petoskey, Mich.