'Fast Money' Recap: Lower Oil Prices a Warning Sign for Stocks

NEW YORK (TheStreet) -- West Texas Intermediate slid 2.7% to $78.38 per barrel on Monday. This will be beneficial to consumers but seems to be a sign of deflation and a global economic slowdown, said Guy Adami, managing director of stockmonster.com. Lower oil prices seem like a "warning sign" for U.S. equities, he added. 

"Every market is being rational except for ours," said Brian Kelly, founder of Brian Kelly Capital. The stock market looks vulnerable near current levels. He is a buyer of the U.S. dollar and the iShares 20+ Year Treasury Bond ETF (TLT) . 

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Pete Najarian, co-founder of optionmonster.com and trademonster.com, said investors should consider buying portfolio protection now that the volatility index has decline so much. He is a buyer of financials, chipmakers and pharmaceutical companies. 

Staying long U.S. stocks could be a "sucker's trade," according to Dan Nathan, co-founder and editor of riskreversal.com. The strong U.S. dollar will be a headwind for multinational companies.

One company that won't suffer from the strong U.S. dollar is Alibaba (BABA) . Neil Doshi, managing director and senior analyst at CRT Capital, has a buy rating on the stock with a $95 price target. 

Alibaba is likely to beat estimates and have its stock price move higher as a result, he said. Nov. 11, Singles Day in China, should be a huge day for the company in terms of revenue. He pointed out that the syndicate banks that handled the IPO have higher earnings estimates than those of the non-syndicate banks. 

After breaking above $46, it appears that it's time to take profits in shares of Yahoo! (YHOO) , Adami said. 

Alibaba is a "mature company that's very profitable," Najarian. The company will "crush" estimates and the stock will move higher. 

Not so fast, says Kelly. Alibaba has most of its exposure to China, which appears to be slowing. If that's the case, then owning shares of Alibaba may be risky.

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If for some reason the stock doesn't move higher on Tuesday, investors should use the pullback as a buying opportunity, Nathan said. Alibaba will likely end the year at its 52-week highs. 

Following Nathan's comments about Alibaba, the other traders were asked for their top "catch-up" trades to end the year with. 

Najarian is buying United Technologies (UTX)  because of the stock's low valuation, stock buyback and recent underperformance. Kelly is selling the SPDR S&P Oil & Gas Exploration & Production ETF (XOP)  because he believes over-production and lower oil prices are here to stay. 

Adami said shares of F5 Networks (FFIV) have 12% to 15% upside by the end of 2014 because of its low valuation and high growth rate.

What else could outperform through the end of the year? According to Dennis Gartman, editor and publisher of The Gartman Letter, investors can expect aluminum stocks, steel stocks and propane stocks to all do well going forward. He remains bearish on oil for the long term, citing high production as a negative catalyst. The global economy, with the exception of Europe, looks relatively healthy. 

Kelly added that gold looks like it may be headed for the range of $700 to $880 per ounce. 

Gilead Sciences (GILD) dropped 2% and was the first stock on the show's "Pops & Drops" segment. "The stock has performed very, very well," Nathan said, but it could be headed lower if shares can't find support near $110. 

Nvidia (NVDA) popped 2%. Najarian said demand for the company's product remains "very strong." The stock is headed higher. 

SunEdison (SUNE) jumped 3%. Kelly said he likes the solar industry over the long term. 

GoPro (GPRO) climbed 9%. Adami said the stock may be headed to $95. 

For their final trades, Najarian is buying Yahoo! and Kelly said to sell-short the iShares Silver Trust ETF (SLV) . Nathan is a buyer of Alibaba on a pullback and Adami is buying McDonald's (MCD) . 

Must Read: Super Important Biotech and Drug Stock Events for November

-- Written by Bret Kenwell

Follow @BretKenwell

Bret Kenwell currently writes, blogs and also contributes to Robert Weinstein's Weekly Options Newsletter.

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