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Karen Finerman's Game Plan As Energy Powers Up

Stocks powered their way higher on Friday with both the Dow and the S&P 500 closing in positive territory for the day and for the week.

Halliburton, Cameron and other energy names helped support the gains with investors betting they had been oversold in the wake of the Gulf disaster. Most notably BP closed in the green.

What's the energy trade?

Instant Insights with the Fast Money traders

The landscape is changing so swiftly if you want to play BP or the oil services stocks I’d do it with options so you can limit your risk, counsels Karen Finerman.

Elsewhere, if you’re looking for a play I’d look at tankers such as Frontline or Teekay , she counsels. If less oil comes out of the Gulf, then the journey to get that oil to the US will be longer.

If you're looking for a play, I'd look at the refiners. With supply potentially coming out of the market, I think it’s bullish for them, says Tim Seymour. I’d play it with a long position in Tesoro.

We continue to own BP, says hedge fund manager Whitney Tilson in an e-mail. And we increased our position this week. In our view the developments over the last several days have made the stock even more attractive to a value investor with a long term horizon.

Click here for our June 9th interview with Tilson “Crazy or Sly: Tilson Increases BP Position”

In the energy space I'm seeing a rotation into quality names such as Occidental and Shell, explains Joe Terranova.

I agree, says Steve Grasso. I’m seeing rotation in Chevron and ExxonMobil.

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BP DEBT OFFERING

CNBC has learned that BP executives met with investment bankers to discuss a likely bond offering as early as Tuesday.

We’re told the offering will likely consist of unsecured bonds with a combination of 5- and 10-year maturities that will yield 8 to 10 percent. That's significantly more than the current yield on 10-year US Treasury bonds.

The goal is to raise $5 billion—more if the market is receptive—and to restore confidence, according to people familiar with the matter.

What must you know?

From what I’m hearing the bond offering is pricing like junk bonds, says Patty Edwards. That says to me more downgrades are coming. For my money, I’d play any place other than BP.

Read More:
> BP $5 Billion Debt Offering May Yield Up to 10% by CNBC’s Kate Kelly

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S&P GOING TO 1375, SAYS TOP STRATEGIST

It has not been a good week for economic numbers: housing starts dropped 10%, jobless claims spiked, and consumer prices dropped for the second month.

You can hardly turn around on Wall Street without running into a negative outlook.

So why does Deutsche economist Joe Lavorgan think the S&P is heading to 1375?

*Watch the video below and find out!




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Trader disclosure: On June 17, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Terranova owns (IPSU), (BX), (PFE), (UDN), (GMCR), (RSX), (TER), (AXP), (BMO), (BBY), (DIS), (XCO), (SWN), (AAPL), (IPI), (SU), (V), (TEVA), (FXE), (FXB), (XOM), (COP), (OXY), (RDS.A); Terranova owns S&P Futures; Terranova owns UK Pounds; Terranova is short the US Dollar; Seymour owns (AAPL), (BAC), (NOK), (SBUX), (F); Finerman’s firm own (AAPL); Finerman & Finerman’s firm owns (BBY); Finerman’s firm owns (BP) calls; Finerman’s firm owns (C); Finerman & Finerman’s firm owns (CVS); Finerman owns (FRO); Finerman owns (RIG) calls; Finerman’s firm owns (RIG) calls; Finerman owns (TK); Finerman is short (IJR); Finerman is short (MDY); Finerman is short (IYR); Finerman is short (SPY); Finerman owns (IWM) puts’; Grasso owns (ABK); Grasso owns (BAC); Grasso owns (BGP); Grasso owns (C); Grasso owns (DYN); Grasso owns (JPM); Grasso owns (LPX); Grasso owns (NDAQ); Grasso owns (PRST)

For Joe Terranova
Terranova works for (VRTS)
Terranova is chief market strategist of Virtus Investment Partners, LTD.
Virtus Investment Partners owns more than 1% of (AMKR)
Virtus Investment Partners owns more than 1% of (IGE)
Virtus Investment Partners owns more than 1% of (DBV)
Virtus Investment Partners owns more than 1% of (XLB)
Virtus Investment Partners owns more than 1% of (XLV)
Virtus Investment Partners owns more than 1% of (XLY)
Virtus Investment Partners owns more than 1% of (XLI)
Virtus Investment Partners owns more than 1% of (XLU)
Virtus Investment Partners owns more than 1% of (DRYS)

For Patty Edwards
Edwards owns (AAPL) for clients
Edwards owns (AMZN) for clients
Edwards owns (BAC) for clients
Edwards owns (BBY) for clients
Edwards owns (C) for clients
Edwards owns (COP) for clients
Edwards owns (CVX) for clients
Edwards owns (DELL) for clients
Edwards owns (DO) for clients
Edwards owns (GE) for clients
Edwards owns (GLD) for clients
Edwards owns (GOOG) for clients
Edwards owns (GLW) for clients
Edwards owns (HAL) for clients
Edwards owns (HPQ) for clients
Edwards owns (INTC) for clients
Edwards owns (JPM) for clients
Edwards owns (MS) for clients
Edwards owns (MSFT) for clients
Edwards owns (NE) for clients
Edwards owns (NSC) for clients
Edwards owns (NVDA) for clients
Edwards owns (PNC) for clients
Edwards owns (QQQQ) for clients
Edwards owns (RIG) for clients
Edwards owns (SLB) for clients
Edwards owns (SPY) for clients
Edwards owns (STI) for clients
Edwards owns (STM) for clients
Edwards owns (TXN) for clients
Edwards owns (UNP) for clients
Edwards owns (VXX) for clients
Edwards owns (VZ) for clients
Edwards owns (WFC) for clients
Edwards owns (WFT) for clients
Edwards owns (XOM) for clients
Edwards owns gold for clients
Edwards owns platinum for clients
Edwards owns silver for clients
Edwards owns the Russell 2000 for clients
Edwards owns the S&P500 for clients

For Steve Grasso:
Stuart Frankel & Co and it’s partners own (BAX)
Stuart Frankel & Co and it’s partners own (CUBA)
Stuart Frankel & Co and it’s partners own (DHR)
Stuart Frankel & Co and it’s partners own (GERN)
Stuart Frankel & Co and it’s partners own (HSPO)
Stuart Frankel & Co and it’s partners own (MERC)
Stuart Frankel & Co and it’s partners own (NWS.A)
Stuart Frankel & Co and it’s partners own (NYX)
Stuart Frankel & Co and it’s partners own (PDE)
Stuart Frankel & Co and it’s partners own (PFE)
Stuart Frankel & Co and it’s partners own (PRST)
Stuart Frankel & Co and it’s partners own (RDC)
Stuart Frankel & Co and it’s partners own (SYMC)
Stuart Frankel & Co and it’s partners own (TLM)
Stuart Frankel & Co and it’s partners own (TRV)
Stuart Frankel & Co and it’s partners own (XRX)
Stuart Frankel & Co and it’s partners own (SDS)
Stuart Frankel & Co and it’s partners own (TBT)
Stuart Frankel & Co and it’s partners are short (QQQQ)
Stuart Frankel & Co and it’s partners are short (AAPL)

For Joe Lavorgna
***No Disclosures***

For Peter Boockvar
Boockvar owns (GLD)
Boockvar owns (GTU)
Boockvar owns (CEF)
Boockvar owns Euros


CNBC.com with wires

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