Publish date:

May 22, 2008 6:24 PM EDT

'Fast Money' Recap: Oil's Not Done Yet

The trading panel says oil could surpass its recent peak in the next few days.

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The trading panel says oil could surpass its recent peak in the next few days.

U.S. stocks got their groove back Thursday, as all three major indices finished with gains. The Dow was up 0.2%, the S&P 500 added 0.3%, and the Nasdaq grew 0.7%.

CNBC's

"Fast Money" TV show, the traders discussed a reprieve from the climb in crude oil prices and an ensuing rally in stocks. Jeff Macke said he doubts oil has topped. He said he believes the price will make new highs within a week.

Guy Adami said people hate being in commodities over a long weekend. He said investors may sell out of oil because they're scared to be long over the weekend.

Tim Seymour pointed out that U.S. consumption looks to be down year over year. He said to watch

Exxon Mobil

(XOM) - Get Exxon Mobil Corporation Report

here. He said there are a lot of dissenters in the company, and the stock's chart looks tricky. He also pointed out recent oil discoveries from

PetroBras

(PBR) - Get Petroleo Brasileiro SA Sponsored ADR Report

Jon Najarian said today marked a chink in the armor for crude's rally. He said it's smart to watch for a situation when oil sells in the face of good news. He said there was a prominent

Wall Street Journal

article touting oil's rise. He said it broke below $131. He said there is aggressive put activity in the

PowerShares DB Commodity Index

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3 Stocks I Saw on TV
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Macke said that it's possible to short oil here, but investors should beware that they are fighting a trend.

On the possibility that speculators are driving oil's rally, Najarian said that speculation isn't possible without fundamentals behind it. He said the oil market is driven primarily by supply and demand, and right now there is real demand in spite of weakness in the U.S.

Macke said that there is speculative action going on, which means that all bets are off concerning where the commodity "should" trade.

Fender Bender

Ford

(F) - Get Ford Motor Company Report

and

UAL

( UAUA) offered bearish news. Ford said it will not make a profit this year, and United said it may begin charging $15 for the first checked bag passengers bring on.

Adami said that some transports are good and some aren't. He said he has liked Ford as a turnaround story, but the stock keeps getting knocked down when it looks like it's ready for a rally.

Macke said Ford is making the wrong product at the wrong time. He said he doesn't want to hear management complaining about steel prices. Najarian pointed out that Ford makes SUVs, and with oil this high, consumers don't want what Ford is selling.

Of the airlines, Adami said "they're trading vehicles." He said that investors can get long

AMR

(AMR)

with a stop at a close below $6. Macke said that any rally in the airlines is a selling opportunity and even a shorting opportunity.

Generating a Merger

NRG Energy

(NRG) - Get NRG Energy, Inc. Report

made a $9.1 billion unsolicited bid for

Calpine

(CPN)

today. Jon Najarian said investors can buy both.

Seymour said this deal is an amazing turnaround for Calpine. He predicted that other bidders may come into play and outbid NRG. He advised viewers to watch

Dynegy

(DYN)

Game Over?

In retail,

GameStop

(GME) - Get GameStop Corp. Class A Report

produced solid earnings, but the stock suffered. Macke said investors should sell the news in video games because the market is maturing and can't sustain previous growth.

Adami compared GameStop to

Starbucks

(SBUX) - Get Starbucks Corporation Report

in that it's building stores quickly. He pointed out that GameStop doesn't appear to have much in the pipeline to support the growth.

Najarian said investors would be wise to remain on the sidelines.

Careful How You Play

Children's Place

(PLCE) - Get Children's Place, Inc. Report

produced an upside surpise. Macke said the retailers are largely facing "rock-bottom" expectations. He said there were tons of short-siders in Children's Place, and they got hurt.

Trouble on the Playing Field

Shares of

Dick's Sporting Goods

(DKS) - Get Dick's Sporting Goods, Inc. Report

took a drubbing today. The traders welcome Dick's CEO Ed Stack to the show to discuss his company.

Stack said the price of gasoline and food is affecting the consumer. He said his company is trying to provide unique and exclusive products, such as baseball cleats tied to stars David Ortiz and Alex Rodrigues. It's a tough environment, he said. He said

Under Armour

(UA) - Get Under Armour, Inc. Class C Report

sales have been great in the first quarter, but other areas were softer.

The traders then discussed which companies were losers to $135 oil. Najarian said the casino business is in big trouble because the U.S. consumer is strapped and can't fly. He told investors not to buy airlines, because they can get in lower.

Seymour said

PetroChina

(PTR) - Get PetroChina Company Limited Sponsored ADR Report

is providing a refined product to a national audience. He said the company is losing a lot of money on spreads.

Let Them Eat Steak

Adami picked high-end steak houses like

Ruth's Chris

(RUTH) - Get Ruth's Hospitality Group, Inc. Report

and

Morton's

(MRT)

Macke said that no one is going to be renting cars, so avoid

Hertz

(HTZ) - Get Hertz Global Holdings, Inc. Report

The traders then discussed the power of OPEC to potentially bring down the price of oil. They welcomed John d'Agostino, hedge fund and private equity consultant, to discuss the matter. He said that the Saudis have shareholders, and they act on the behalf of those people. He said people shouldn't be surprised that they are maximizing value.

Seymour pointed out that there isn't much supply in non-OPEC producers like Russia and Kazakhstan. He said that OPEC pumps 40% of daily production but controls 80% of the swing supply of oil. For this reason, he said, OPEC is the only entity that has the power to provide oil to the market at this point.

On global infrastructure, Seymour said that the companies are able to pass on price increases. He said this story will continue to be strong and pointed out that rails have been "ripping." Adami pointed to enormous buildout in China. He said the country is building entire cities across the country. He said steel names still have pricing power.

Ship Shape

Najarian said

DryShips

(DRYS) - Get DryShips Inc. Report

and

Eagle Bulk Shippers

(EGLE) - Get Eagle Bulk Shipping Inc Report

are buys here. He said the Baltic dry shipping rates are increasing.

Macke said he thinks the shippers' pricing model doesn't make sense, because companies like

Wal-Mart

(WMT) - Get Walmart Inc. Report

won't be able to buy goods shipped across the globe at exorbitant shipping prices.

Trader Radar

Micron Technologies

(MU) - Get Micron Technology, Inc. (MU) Report

traded on unusual volume today.

For some more summer trades, Macke selected Wal-Mart and

Disney

(DIS) - Get Walt Disney Company Report

, saying consumers aren't going international for their vacations.

Adami recommended

Priceline.com

(PCLN)

on a high-volume dip.

Seymour said that international luxury money is fueling earnings at

Marriott

(MAR) - Get Marriott International, Inc. (MAR) Report

, so the stock is a buy.

Jon Najarian said cruise lines have passed though energy costs. He said that companies like UAL are also figuring out ways to pass on price increases.