Oil Hits New Record; Intel Sets Up For Tuesday Rally

INTEL TO RALLY MARKET TUESDAY

The headline:Intel Rises 7% After Hours on Higher Guidance; Meets on Earnings, Beats on Sales

The Dow component’s earnings should be a good start for Wednesday, Pete Najarian said. It’s also an example of why it’s important to pay attentions to the options for a roadmap, as it was options traders who were looking for a 7% move.

The report was just fine, Jeff Macke said, but because expectations were so low after the stock got beat up so far this year, the in-line number was good enough for a rally. And if INTC is a tell for any broader aspect for the stock market, it’s a sign that corporate demand hasn’t fallen off a cliff and remains intact. It is harder to extrapolate what the numbers mean for consumer demand, though.

So how do you trade it? Guy Adami would be restrained. It couldn’t hurt to take profits, he said, and then buy the stock again on a dip.

AFTER HOURS ACTION: CSX

The headline:CSX First Quarter Profit Surges on Volume, Fuel Surcharges

The railroad company reported revenues up 12% and profit up 46%. This bodes very well for the rest of the rail space, Guy Adami said. CSX is one of the rails that is “doing it all right.”

Pete Najarian is watching Norfolk Southern off this, which is cheaper relative to its peers but enjoys the same benefits that come from transporting in-demand products like coal and agricultural chemicals.

REALLY FRIENDLY SKIES

The headline: Airline Stocks Drop Even with Delta (DAL) - Northwest (NWA) Merger as Oil Surpasses Record

Give it time, Pete Najarian said. Once the synergies are implemented and when more consolidation comes to the sector the airlines could actually become profitable investments.

Jeff Macke doesn’t buy that. He thinks we’ll all be long dead before Delta-NWA makes a penny.

J&J PROFIT JUMPS 40%

The headline:Johnson & Johnson Profit Soars, Topping Estimates, on Strong Sales of Listerine, Tylenol & Zyrtec

Even though the stock did nothing off the news, it’s important because it shows that the company now has 20% of its revenues coming from consumer brands, according to Guy Adami. J&J is moving toward a Procter & Gamble (PG) like model and he would be long.

CHART OF THE DAY: VENTAS

The headline: Healthcare REIT Ventas (VTR) May Be Overvalued: Finerman

Ventas is priced to perfection with only a fair yield, Karen Finerman said. Its asset values are not going up either. Don’t buy.

OIL JUST SHY OF $114

The headline: Oil Surges 1.8% to Record $113.79; Gasoline Prices Jump to Record $2.88 Per Gallon Average

For the first time in a while, oil’s action wasn’t driven by the dollar, according to Tradition Energy’s Addison Armstrong. This particular move had to do with supply concerns in Mexico, Nigeria and Russia. That said, if the dollar/euro level falls below the critical $1.60 level, he thinks oil could surge to $120 per barrel. If the dollar stabilizes, though, he thinks oil will consolidate between $100 and $110.

But it’d be hard to get on the other side of the short dollar, long commodities trade that has galvanized in recent months, Addision said.

Jeff Macke called this a “textbook breakout.” The short-lived days of $100 to $110 oil are already over, he said. Make way for $120.

WHAT A CROC

The headline: Crocs Plummets 40% After Slashing Profit and Sales Guidance For First Quarter

Bottom pickers are coming in, Pete Najarian said, but that doesn’t mean you should. There’s no reason to pile into CROX.

Management has lost all credibility, Karen Finerman and Jeff Macke said, after it built up inventories in the face of plummeting demand.

HORMONAL BALANCES

The headline: New Cambridge Study Shows Traders Make Larger Profits When Testosterone Levels are High

What’s that tell you? Women make better traders, Karen said. (Read more on the study here).

Armstrong Owns (VLO)