Natural Gas Stocks Have Yet to Catch Fire

This column was originally published on RealMoney on March 24 at 12:55 p.m. EST. It's being republished as a bonus for TheStreet.com readers.

Lots of mergers and acquisitions activity, except where I most expect it. Natural gas has come down hard, and the stocks themselves have been pummeled. You would expect, right here, right now, a major to come in and snap up a minor. After all, when everything was going higher, you got lots of nice bids. I am wondering if the people who run these major firms are just momentum players, like so many others in the market -- and no more than that.

For example, and I harp on it, but what the heck is Cimarex(XEC Quote) doing back at $41? How can Southwest Energy(SWN Quote) be 12 points from its higher? Isn't the Houston Exploration(THX Quote) company of interest to some suitor at $49, down 22 points from its high? Twenty-two points? That's amazing. Devon(DVN Quote) down $10 from its high? Canadian Nat(CNQ Quote) down $8 from its high? EnCana(ECA Quote) still off $12? Quicksilver(KWK Quote) off $15? That's ridiculous! Isn't that amazing?

Let's also think about the drillers. Baker Hughes(BHI Quote) off $12. How about Lufkin(LUFK Quote), which probably has the strongest momentum. Dare I mention National Oilwell Varco(NOV Quote), down $15, or Nabors(NBR Quote), down $15 and hated?

I bring all of these up because while natural gas is down, anyone who considers it also "out" is kidding himself. I believe it has found a level to bounce from. Meanwhile, oil is stubbornly high, and you know I believe it's going higher, which is why I hold on to my Occidental(OXY Quote) and Halliburton(HAL Quote), and why I maintain hefty positions in the infrastructure plays, ABB(ABB Quote) and Foster Wheeler(FWLT Quote), which build the alternatives to oil plants or fix boilers and refineries.

This exercise wouldn't matter if the refiners and the majors weren't at or going to near highs and stocks like Marathon(MRO Quote) and Occidental just don't want to quit. Not to mention BP(BP Quote), which is almost at its high, for no reason whatsoever compared to other players.

What I am saying is that these stocks should be bought here with the idea of little downside and a potential big payoff if 1. natural has goes up, or 2. the majors use their currency.

Random musings: Those of you who are in Lucent(LU Quote) should know I would ring the register and move on, like the company is! If you want to read my multiple takes on Cephalon(CEPH Quote), I have to refer you to Action Alerts PLUS for the details, but I think you should know the personal nature of what went wrong here.

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At the time of publication, Cramer was long Occidental Petroleum, Halliburton, ABB, Foster Wheeler and Cephalon.