Stocks Shake Off $101 Oil
OIL CROSSES $101
The headline: Crude Oil Hits Intraday High of $101.32 Before Closing at Record $100.74; Energy Stocks Surge
Even as oil touched a new high for the second day in a row, it seemed like investors met it with a sense of complacency. Karen Finerman thinks that’s because the underlying geopolitical factors are making people wonder if $100 oil is “for real.” If the rally was because of a true supply and demand issue she believes the reaction would be different. Also, she noted, the new high is not a record if adjusted for inflation and with recession fears looming it’s hard to see how oil could stay at its current levels.
Jeff Macke said that considering this is the third run for $100 oil has made in the past several months – and since there are rarely “triple tops” or “triple bottoms” – he thinks this could be a breakout move for the commodity to the upside. Get long the USO oil ETF , he said.
Guy Adami would play it through natural gas, which tends to lag oil prices by a few months. XTO Energy (XTO) or Apache (APA) can provide the exposure.
On the natural gas front, Tim Seymour agreed that it will pick up steam as oil barrels even higher. His favorite nat gas play is the Russian-based Gazprom that is the biggest nat gas provider in the world.
> Who’s Getting Rich Off $100 Oil
H-P TOPPING TOUGH TECH TAPE
The headline: Hewlett-Packard Best-in-Breed After Earnings, Outlook Exceed Expectations
It was refreshing to hear that HP didn’t whine and moan about the economy in its conference call, according to Jeff Macke. That said, he would still sell it because, well, “it’s been 2008 all year.”
Guy Adami expects HP to propel its terribly beaten-down tech brethren – think Cisco (CSCO), Intel (INTC), Microsoft (MSFT) and IBM (IBM) – higher as they will become relief plays cheap on valuation.
GARMIN GIVES BAD DIRECTIONS
The headline: Garmin Opens Higher But Plunges After Conference Call Comments
Karen Finerman saw a red flag for all the GPS makers back when Nokia (NOK) bought NAVTEQ and put a great deal of pricing pressure on the whole group.
These gadgets have reached a saturation point, according to Jeff Macke. GRMN will likely drift lower and it shouldn’t be bothered with.
The headline:Suntech Power Leads Solar Slaughter After Weaker-than-Expected Earnings
The solar stocks have a high quality problem, as far as Tim Seymour is concerned: they can’t keep up with demand. The industry should continue to grow – especially with oil so high – and he sanctioned the solar stocks to be bought on dips.
Guy Adami agreed. Evergreen Solar (ESLR) is his favorite of the lot.
Jeff Macke explained that the reason the entire complex gets taken down whenever one of them reports a problem is because they just aren’t mature enough as a sector yet.
SOFT DRINKS FOR A SOFT ECONOMY
The headline: PepsiCo Reaffirms 2008 Profit Forecast, Announced $4.3B Buyback
The food and drink story continues to work in a slowing economy, Jeff Macke said. Pepsi is solid and he wouldn’t expect it to miss earnings expectations any time soon.
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Trader disclosure: On Feb.20, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (HAS), (YHOO), (ATVI); Finerman Owns (GS); Fineman's Firm And Finerman Own (KALU); Finerman's Firm Owns (MSFT), (TSO), (VLO), (YHOO), (AAPL); Finerman's Firm Is Short (IYR), (IJR), (MDY), (SPY), (IWM),(COF); Finerman's Firm And Finerman Own (CROX) And (CROX) Options; Finerman's Firm Is Short (LEH) And Owns (LEH) Puts; Seymour Owns (AAPL), (MER), (MSFT), (S), (TSL); Seygem Asset Management Owns Gazprom OAO; Seygem Asset Management Owns (NIHD), (GFI); Seygem Asset Management Owns Lebedyanskiy OAO; Seygem Asset Management Is Short (EEM)