'Fast Money' Recap: Tech Leaps Over Oil

The trading panel notes that as oil pulled back, tech stocks entered the breach.
By Mike Taylor ,

The New York stock market saw the bright side into Tuesday's close as oil retreated slightly. The Dow added 0.6%, the S&P 500 climbed 0.7%, and the Nasdaq tacked on 1.5%.

On

CNBC's

"Fast Money" TV show, Pete Najarian pointed out today's rally in technology. He said that as soon as oil cracked, stocks such as

IBM

(IBM) - Get Report

,

Hewlett-Packard

(HPQ) - Get Report

,

Google

(GOOG) - Get Report

and

Apple

(AAPL) - Get Report

took off. He also noted that the volatility index is going up, and the financial services stocks didn't move.

Guy Adami said he believes the tech sector is defended from the continued rise in energy prices. He said the market is in the early stage of a tech recovery, but he cautioned against racing into the sector.

Macke said that he doesn't feel completely safe in technology. He said the space will have trouble withstanding "huge storms" that the market will continue to see.

Najarian said that he believes spending on technology is there. He pointed out that people are excited about

Juniper

(JNPR) - Get Report

,

Cisco

(CSCO) - Get Report

and the 3G buildout. He also observed that most analysts have price targets above $200 for Apple.

3 Stocks I Saw on TV

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Adami said he believes there will be a two-year move upward in tech, but he said it's a little early to get long.

Don't Top Me Off

The traders observed that daily gasoline consumption has declined recently as the price oif crude oil has risen. Adami said investors should avoid

General Motors

(GM) - Get Report

, but there might be a good downstream trade in

American Axle

(AXL) - Get Report

and

Borg Warner

(BWA) - Get Report

.

Finerman said there appears to be a great deal of oil in storage. She said that one possibility is that there is excess oil out there which will help reduce the price. She said another explanation is that there are speculators keeping oil on ships. She said that such a venture would be very expensive.

Najarian said it was possible, adding that there is a shortage of large shipping boats.

Macke said that oil can pull back $15 before it does anything wrong technically. Adami said he thought that the rise of

Powershares UltraShort Oil & Gas

(DUG) - Get Report

on Thursday and Friday despite oil's increase meant that oil might top, but now he's not sure.

Najarian said that oil services stocks might be another solid play. He said

Baker Hughes

(BHI)

isn't dependent on the price of crude. He said he believes the stock is going to $100.

Macke said that he's concerned that

Exxon Mobil

(XOM) - Get Report

is bowing to pressure from the Rockefeller family to explore alternative energy possibilities. He said that Exxon Mobil is an oil company, and it should focus on that to continue to profit.

Najarian said Exxon Mobil is smart to diversify revenue streams. Adami said that just like

Newmont Mining

(NEM) - Get Report

has been wrong as a proxy to gold, he thinks Exxon Mobil is not a good play on the rise in oil prices. He said Exxon Mobil also trades at a premium to

Chevron

(CVX) - Get Report

.

Bad Day at the Bank

The financials stocks got hammered today. Najarian said that the

Financial Select SPDR

(XLF) - Get Report

barely finished positive today. He also observed heavy put activity in

Bank of America

(BAC) - Get Report

.

Macke pointed out that

Lehman Brothers

( LEH) shares behaved well today. He said the financial stocks are trading vehicles, as investors don't know about their balance sheets. However, viewers should respect the way the stocks traded today, he said.

Najarian said the best plays in the financial services space are still

Visa

(V) - Get Report

,

MasterCard

(MA) - Get Report

and

American Express

(AXP) - Get Report

.

Fine China

The traders then spoke with Steven Cortes, CEO of Veracruz LLC about the potential of plays on China. Cortes said that China can't grow without the U.S. consumer. He showed a chart showing a very high correlation between the U.S. consumer and the Hong Kong and mainland China markets. He said that because the U.S. consumer is badly wounded, the bullish China story may have lost sustainability.

Adami said that buying the dip in China here is scary. Finerman said she's been skeptical that China is decoupling from the U.S., saying the U.S. is still a big economic presence.

Cortes said that some plays on the trend are shorting the

iShares FTSE China

(FXI) - Get Report

, shorting

PetroChina

(PTR) - Get Report

, buying the

SPDRs

(SPY) - Get Report

and buying

Humana

(HUM) - Get Report

,

Costco

(COST) - Get Report

and Wal-Mart.

On a Cloud

The traders then spoke with Gene Munster, an analyst at Piper Jaffray, about Google's new innovation called cloud computing. Munster said this idea is another reason for investors to get behind google. He said some possible applications of Google's idea include taking photos of barcodes on consumer items for real-time comparison shopping or a GPS-based electronic golf caddy to help people select clubs.

Adami said Google stock is the cheapest in its space and he likes it at these levels.

Industrial Strength

The traders talked about the rising value of coal today. Najarian said that

Bucyrus

( BUCY) is a name he likes. He also recommended

Greenbrier

(GBX) - Get Report

.

Adami pointed out that billionaire investor Carl Icahn owns Greenbrier shares. He said he also likes

Westinghouse Air Brake

(WAB) - Get Report

. He said investors might want to get long

Joy Global

( JOYG) but they should wait for a while because the stock is in a downdraft.

To discuss a "comfort trade" off the pain currently being felt by the U.S. consumer, the traders spoke with noted trend observer Donny Deutsch. Deutsch said that consumers will be looking for retro activities like the

Indiana Jones

movie and will be spending more time at home grilling.

Macke said that he thinks

Microsoft

(MSFT) - Get Report

and Wal-Mart win on this trend.

Finerman said perhaps cable companies would be another way to play this phenomenon. She said

Comcast

(CMCSA) - Get Report

and

Time Warner Cable

(TWC)

are two such stocks.

Najarian said

Home Depot

(HD) - Get Report

is another potential play on the hurting consumer, saying the stock is near its lows and trades at a price-to-earnings ratio of 11.

Trader Radar

Darden Restaurants

(DRI) - Get Report

traded on extraordinary volume today.

JetBlue

(JBLU) - Get Report

announced deferrals in orders of airplanes. Finerman said that the combined lower expenditures and the company's decision to raise capital might mean things aren't so good for JetBlue.

Macke said this might be bearish for

Boeing

(BA) - Get Report

as well, because after awhile the airlines going bankrupt may hurt the airplane manufacturers.

The traders then went on to discuss the ethanol "boondoggle." Finerman said that if she were president she would get rid of the government ethanol program. She said that McCain appears most likely to get rid of it but she believes every presidential candidate will look at the program because it is so suspect. She said

Tyson Foods

(TSN) - Get Report

would win in the absence of ethanol subsidies. Macke said

Pepsico

(PEP) - Get Report

would also do better if the ethanol program were removed.

Adami said natural gas would be another winner, pointing viewers toward

Clean Energy

(CLNE) - Get Report

.

Fast Messages

A viewer asked for a patriotic stock that would perform well in the current energy environment. Adami chose

MDU Resources

(MDU) - Get Report

, saying it is relatively cheap but investors should look for a pullback.

A second viewer asked which beer stock is the best. Macke said

Molson Coors

(TAP) - Get Report

is the best.

A third viewer asked what would be the best energy sector for the next 10 years. Finerman said wind is the best. Najarian recommended wind, natural gas and solar all together.

Final Trade

The traders picked stocks that would perform well for cnbc.com's "Million Dollar Portfolio Challenge," which is a lot like

TheStreet.com's

"Beat the Street." Adami selected

Charter Communications

(CHTR) - Get Report

. Finerman picked

Alliance One

(AOI)

. Najarian chose

Washington Mutual

(WM) - Get Report

.

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