Although our outlook for oil prices and the US energy patch favors an overweight position in core midstream holdings, nimble investors can generate alpha in upstream names by buying when oil prices retreat to the low end of their range and taking some profits off the table when they recover.

Our intermediate-term outlook calls for oil prices to spend most of their time between $40 and $55 per barrel, with occasional upswings and downswings beyond this range.

That said, timing and stock selection will be critical to producing differentiated returns.

We couldn’t have timed our January 2016 purchases of Anadarko Petroleum Corp (NYSE: APC), Concho Resources (NYSE: CXO) and EOG Resources (NYSE: EOG) any better—or, for that matter, our call to take a partial profit in these names a year later.