NEW YORK (TheStreet) -- Crude prices plunged 4.2% on Friday, putting the commodity lower by 12.2% on the week. The afternoon selling overwhelmed stocks and the S&P 500 declined 1.6%. However, it wasn't all doom and gloom on the CNBC "Fast Money" show.
Oi prices have long-term support near $56 per barrel, according to Brian Kelly, founder of Brian Kelly Capital. Friday's price action felt "panicked" in the stock market, evident by the jump in the volatility index. The market is repricing risk and will likely bounce, if oil prices can begin stabilize.
This is a pullback to buy, said Pete Najarian, co-founder of optionmonster.com and trademonster.com. The broader market is a buy if oil prices bounce, but look for companies that reported strong earnings and impressive sales, like Costco Wholesale (COST) , as a great current buying opportunity.
While he's not bearish on equities, the S&P 500 looks a little expensive based on valuation, given where oil prices are, said Tim Seymour, managing partner of Triogem Asset Management. The forced selling in oil and energy is likely the result of investors, traders and hedge funds being over-leveraged and now being forced out of their positions.
While the energy sector is certainly oversold, investors don't need to step in and try to pick a bottom, he added.
With the Federal Reserve's FOMC meeting on tap for Wednesday, the market may trade lower into the event, reasoned Dan Nathan, co-founder and editor of riskreversal.com. However, with some cooperation from oil prices, which need to stabilize, the markets could rally into year's end following the announcement.
Dan Greenhaus, chief global strategist at BTIG, agreed with the trading panel that in order for the equity markets to move higher oil prices need to stabilize. Energy stocks comprise about 8% of the S&P 500 and despite the sector's selloff, the index continues to head higher, with the exception of the past few days, he pointed out. Investors are beginning to get "very, very concerned" with the high yield debt energy companies. The bright spot however, is that lower oil prices take pressure off the consumers.