The bull market is entering a new phase, but PNC Financial's Jeffrey Mills believes that's no reason to get negative on stocks.

In an interview on CNBC's "Futures Now," the firm's co-chief investment strategist acknowledged it will be hard to replicate last year's record gains. He referred to 2018 as a "reset year" as stocks retrace.

"The market is catching its breath," Mills said Thursday. "There's going to be a continued push and pull between strong fundamentals. So, we have solid growth [and] really good earnings, but then multiples that have come down."

Despite his prediction of a near-term market pause, Mills doesn't think investors should get overly defensive. He listed energy as a top play in this environment.

"I would tactically use this weakness if you are underweight energy to start to add. It looks like the commodity is starting to firm here around $66 [a barrel.] It was overbought, so we're consolidating here," he said.

Mills also favors financials, a group that's down about 2 percent so far this year.

"We continue to like the banks. We don't think it's as much as a rising rates story as it is a deregulation and loan growth story," he said.

As for the rest of the market, he isn't waving a white flag. Mills is confident the Index will stay above flatline this year. Right now, it's up nearly 4 percent in 2018.

"Reset year to me means probably the worst-case scenario isn't that bad, but the best-case scenario isn't that good. So, I'm thinking something in the 4 to 7 percent total return range," Mills said.