The energy sector is already up nearly 1% in the new year, after having its best year since 2007 last year. Bank of America (BAC) didn't waste time in 2017 in changing up its ratings on stocks in the sector.
"I like [the call]," Virtus Investment Partners Chief Market Strategist Joe Terranova said on CNBC's "Halftime Report" on Wednesday afternoon. "I still think there's room to the upside for energy."
At the same time, traders should take note of the "recovery and survival of shale," he said. "I think if you look at a name like EOG, certainly in that environment, they win."
M&A is on the horizon for the sector as "shale survivors" go after the assets of "these troubled companies," he claimed.
As oil prices push into the $50 per barrel range, shale production continues to rise along with rig counts, Najarian Family Office cofounder Jon Najarian noted. "If we push up toward $60, it's going to go up even faster."
(Separately, Occidental is held in Jim Cramer's charitable trust Action Alerts PLUS. See all of his holdings here.)