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NEW YORK (TheStreet) -- After an early decline, stocks quickly recovered and the S&P 500 finishing 0.52% higher Monday. 

There are a lot of investors waiting to put money to work in stocks but who are fearful of a pullback, Tim Seymour, managing partner of Triogem Asset Management, said on CNBC's "Fast Money" show. 

He acknowledged there are reasons not to be overly optimistic but investors have totally overreacted to China and the devaluation of its currency. There's only a handful of companies in the S&P 500 that generate more than 10% of revenue from the country, Seymour explained. 

Steve Grasso, director of institutional sales at Stuart Frankel, is negative on the market. He said he's not predicting a total collapse but as the S&P 500 remains rangebound and continues to pullback to the 200-day moving average, the index looks to be weakening, not strengthening. When the Federal Reserve does increase rates, it'll be a negative for stocks. 

Investors have to respect the fact that the S&P 500 continues to find support near 2,050 and that the iShares Russell2000 ETF (IWM) has climbed back above $121, according to Guy Adami, managing director of This type of price action bodes well for the bulls. 

Dan Nathan, co-founder and editor of, made the case that investors can sell biotech funds on rallies such as the iShares Biotech ETF (IBB) and the SPDR S&P Biotech ETF (XBI)  because they remain in "sharp downtrends."

The housing sector is a "very good area of the market" and is now breaking out, according to Carter Braxton Worth, a technical analyst at Cornerstone Macro. The sector outperformed the broader market in 2012 but disappointed investors in 2013 and 2014.

Now it's breaking out once more and investors can stay long. The exchange-traded funds are trading well, even with an impending rate hike on the table, Worth added. He also noted that the housing market tends to rally at the start of stock market rally, not the end, so this particularly rally is noteworthy. 

Seymour likes housing stocks, particularly Ryland Group (RYL) , D.R. Horton (DHI) and PulteGroup (PHM) . Margins and management's visibility is improving, and valuations are attractive, he added. Grasso likes PulteGroup and KB Home (KBH)

Home Depot (HD) tends to benefit from a rebound in housing, Adami said. The company reports earnings on Tuesday. If shares sell off -- which he doesn't believe will happen -- then investors should buy the stock. Use a $28 stop when buying the iShares-Dow Jones U.S. Home Construction (ITB) ETF, Nathan suggested. 

Shares of Tesla Motors (TSLA)  closed up nearly 5% to $255 Monday after an analyst at Morgan Stanley raised his price target to $465 from $280. 

When it comes to valuation, investors give Tesla a "free pass" on future projects, Seymour said. While he likes the energy storage business, he believes the stock is overpriced. Shares will likely fall back to $220 once the bullish momentum wears off, he added. 

Adami was originally looking to buy the stock on a pullback to $225 but it only fell to $236. Investors can be long the stock with a stop-loss at $242, its recent secondary price, he said. Nathan said investors who are focused on the very long term can be long Tesla despite having an overvalued stock. 

West Texas Intermediate oil hovered near $42 per barrel and looks very likely to drop into the $30s, according to Dennis Gartman, editor and publisher of The Gartman Letter. While the bear market in oil is likely 90% of the way complete, the last 10% tends to be the wildest and most extreme. While low oil prices are a win for consumers, it'll be tough on oil-producing regions of the U.S., he said. 

Nathan said the commodity looks like it's hanging on for dear life and will likely trade lower. Seymour disagreed, saying oil stocks have been trading well despite oil prices failing to rebound. Adami still likes refinery stocks Valero Energy (VLO) and Tesoro (TSO) .

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