GO
Loading...

Oil Fever Breaks, Stocks Rise

PAST $135 AND BACK AGAIN

The headline: Crude Oil Falls 1.8% to $130.81 After Climbing as High as $135.09 in Overnight Trading

Jeff Macke isn’t rushing to call a top in oil. It can have down days, he said, but the trend is still higher. “Nothing has changed,” he said.

It’d be unusual for people to put in short positions on commodities over a long weekend, Guy Adami said, but he wouldn’t be surprised if we saw some of that with oil this weekend. Expect some short-term profit taking, he said.

To add to that school of thought, Tim Seymour noted that the Department of Energy said Thursday that U.S. consumption was actually down slightly year over year. That could rain on the long oil parade, he said.

SIGN OF TOP? OPTIONS ACTION

The headline: Jon Najarian Seeing Unusual Options Activity in PowerShares DB Commodity ETF

The way to spot a top is always to watch for when something starts to react negatively to good news, Jon Najarian advised. That could be happening for oil, which traded down Thursday despite a media consensus that it’s only going higher.

Najarian also noticed “aggressive” put buying in the DBC, a commodity index that’s 60% made up of crude and heating oil.

That being said, he thinks the oil trend is still rooted in supply and demand. As long as that demand is there outside of the U.S., it’d be hard to get short.





PROFIT GUZZLER

The headline: With Oil Prices Surging, Ford No Longer Expects to Be Profitable by 2009

Guy Adami, who has long sung the praises of Ford, is backing away from his bullish position. Ford’s still a turnaround story, he said, but the energy run is suffocating for the automaker.

Don’t forget about other commodities, Tim Seymour said. Ford is also struggling under the weight of sky-high steel prices.

Unfortunately for Ford, it sells the wrong product at the wrong time, Jeff Macke said.

CARRY ON OR IT’LL COST YA

The headline: Will Other Airlines Follow AMR in Charging $15 For First Checked Bag?

Think of the airlines as trading vehicles and nothing more. That advice came from Guy Adami and Jeff Macke. Adami recommended trading the swings in AMR with a tight stop below any close under $6. Macke wants to short the airlines on rallies.

POWER DEAL

The headline:NRG Energy Makes $9.1B Offer for Calpine in Bid to Become Largest U.S. Power Producer

Tim Seymour thinks this likely won’t be the only bid for Calpine or the last of energy M&A activity.

Jon Najarian would be buying both stocks as Jeff Macke reminded that NRG is still a great play if you’re a nuclear power bull, as it’s one of the only companies to actively try and get a new nuclear plant online in the U.S.

GAME OVER?

The headline:GameStop Tops Profit, Sales Estimates, But Shares Tumble on Disappointing Outlook

The video game complex can’t grow at a 25% clip forever. We’re entering a period of maturation in the gaming cycle, Jeff Macke said. It’s best to take a break from these stocks and buy them back lower.

Guy Adami added that the video game companies can’t sustain the expectations because there isn’t anything exciting in the short-term pipelines other than the Wii Fit.

These stocks are best bought right before the Consumer Electronics Show in January, Jon Najarian added.

BRIGHT SPOTS IN RETAIL

The headline: Limited Brands Shares Jump After Profit Tops Expectations; Children’s Place Surges 16% on Better-Than-Expected Profit

There are retailers worth bottom picking, Jeff Macke said, but most retail stocks are still generally best thought of as trading vehicles.

CONSUMER NOT IN SPORTING MOOD

The headline: Shares of Dick’s Sporting Goods Drop 16% as Company Lowers Forecast

CEO Ed Stack acknowledged that energy and food prices are hurting the consumer, but said DKS stays on top of it by offering exclusive products that make its stores a destination, as well as carrying brands like Under Armour and Nike that remain stable despite the downturn. And while ultra-discretionary sports like golf, fishing and camping are getting hit the worst, baseline businesses like children’s athletics are still hitting on all cylinders, Stack said.

Contact Fast Money

  • Showtimes

    Halftime Report - Weekdays 12p ET
    Fast Money - Weekdays 5p ET

Halftime Report

  • Bill Nygren, Oakmark Fund, explains why Apache, Bank of America and Google will be winners in 2015.

  • Nick Tiller, Sustainable America founder and chairman, tells CNBC's Kate Kelly oil prices are poised for a tradable rally. Tiller likes the Brent ETF and energy sector.

  • Discussing interesting trends contributing to the market's rally into year's end, with the FMHR trader Josh Brown and Dan Greenhaus, BTIG.