'Fast Money' Recap: Refiners Lookin' Fine

Najarian was skeptical of rumors that Blackstone (BX Quote) was contemplating a buyout of Eastman Kodak (EK Quote). He did note that there was a lot of speculation on Kodak, and said someone could take the company out because its shares are cheap. Macke disagreed, cautioning viewers to stay away from Kodak.

On the recent rally in financials and homebuilders, Macke said to buy dips and sell rips. He said abandoning that strategy was a bad idea. He recommended trimming gains on rallies and said he sold some Wal-Mart (WMT Quote) today.

Najarian agreed but said some investors are buying call options in case the rally continues. He noted active buying of at-the-money calls in Lennar (LEN Quote) and Toll Brothers (TOL Quote). This technique allows investors to take gains in stocks as they rally and then take a fraction of those profits to buy options.

Seymour said that Latin American homebuilders were still a good play. He recommended Gafisa (GFA Quote) and Cemex (CX Quote).

Noting a bull market in refiners and predictions that gasoline prices would hit $4 a gallon this summer, Seymour said that Valero (VLO Quote) missed on earnings. He said that refined gas is trading at a less expensive rate than where crude is trading, which he believes is unsustainable. He said he likes Valero and ConocoPhillips (COP Quote). He also recommended Tesoro (TSO Quote) because of heavy short interest.

CNBC contributor and director of market research at Tradition Energy Addison Armstrong joined the crew to discuss the bull market in refiners. He said he likes Valero and Frontier Oil (FTO Quote). Najarian said he would buy on a dip in Valero. Finerman said her fund has stakes in Sunoco (SUN Quote) and Tesoro.

Steve Liesman, a CNBC reporter, joined the show to discuss the Fed's $29 billion loan to help JPMorgan with its buyout of Bear Stearns. The loan has a 10-year term and an interest rate of 2.5%, although it will fluctuate. Najarian said that the rate was fantastically cheap. The traders discussed whether the Fed believed it would take 10 years to resolve the credit crunch. Liesman said he believes JPMorgan thinks it needs 10 years to pay back the loan.

Macke was skeptical, saying the Great Depression lasted 10 years. He said that in 10 years, either there will be financial Armageddon or JPMorgan will have made a large amount of money.

Finerman said the Fed's action indicated that JPMorgan will have the money as long as it needs it.

Trader Radar

Sherwin-Williams (SHW Quote) traded lower on almost twice its average daily volume today.

Carter Worth, chief market technician at Oppenheimer, joined the show to talk about how to trade rotation in the market. He recommended Arch Coal (ACI Quote), noting a bearish-to-bullish reversal in the chart. He advised viewers to sell rallies in the financials.

Najarian said that investors are selling puts in the Materials Select Sector SPDR (XLB Quote). He recommended buying the ETF. He also likes Arch Coal.

Finerman said she sold shares of Fannie Mae (FNM Quote) on its rally and would sell the financials generally.