Again, market moves were all about oil . As trader Joe Terranova first explained on Halftime, he thinks the path of least resistance in oil is higher.
As if the geo-political unrest in the Mideast wasn’t enough of a catalyst he sees a confluence of events coming together – and they’re all bullish oil.
For example, China’s oil demand in February was at its second highest level, ever. Also the situation in Japan seems to be improving and the dollar appears to be moving lower, broadly. On top of all that, Terranova says seasonal factors are bullish.
Lately as oil moves in one direction stocks move in the other and Tuesday was no exception with both the Dow and S&P closing lower.
How should you position now?
Instant Insights with the Fast Money traders
As you might imagine Terranova expects crude to break out -- above its March high of $106.50. If you’re not somebody who trades futures, Terranova suggests being selective with equities. Not all energy stocks are moving on higher oil. He likes long UPL as well as Petrobras. “Or you can also buy upside calls in the USO," he says.
In this space, trader Patty Edwards likes playing liquid natural gas and exploration. She suggests long Southwestern Energy and Chicago Bridge & Iron.