NEW YORK (TheStreet) -- Despite a number of major market events, the S&P 500 closed only 0.36% lower. While the Greece referendum was the focus going into the weekend, not many would have expected oil to take center stage on Monday, as West Texas Intermediate plunged over 7%. The commodity is now down over 10% in the past three trading sessions.
While oil prices are down substantially, investors should stick with refinery stocks, Guy Adami, managing director of stockmonster.com, said on CNBC's "Fast Money" TV show. He is looking for Tesoro Corp. (TSO) to climb above $95 and for Valero Energy (VLO - Get Report) to make a run at new all-time highs.
Pete Najarian, co-founder of optionmonster.com and trademonster.com, pointed out that yields for corporate energy bonds continue to shoot higher, making it appear as though some companies will be unable to repay their debt and ultimately go bankrupt. Investors should use caution.
Investors seem to be focused on oversupply, but there is also a lack of demand, according to Dan Nathan, co-founder and editor of riskreversal.com. "I don't think oil is done going down," he said.
The drop in oil prices helped give airline stocks a boost. The industry is trading well, despite last week's Justice Department investigation over possible collusion involving pricing, said Hunter Keay, senior analyst at Wolfe Research. Keay doesn't think the DOJ will have anything too substantial against the airlines. He likes the industry and his top picks include Allegiant Travel (ALGT - Get Report) and Alaska Air Group (ALK - Get Report), maintaining price targets of $212 and $83, respectively.
Investors should not sell short oil because the commodity could rally just as quickly as it has fallen, said Karen Finerman, president of Metropolitan Capital Advisors.
Dennis Gartman, editor and publisher of The Gartman Letter, also said investors should avoid selling short oil after the rapid decline. However, he still thinks oil is still headed lower. He said he is staying long tanker stocks because tankers are storing the oil being held back because of low prices.
As for China, Gartman took a small long position in the iShares China Large Cap ETF (FXI - Get Report). Chinese stocks have traded terribly of late but are down near critical support, he explained. If they trade better, he will add to his long position. But if it falls by "a couple of percent," he will likely get out for a small loss.
Adami has been saying to buy the FXI ETF at $44 for some time now. Investors can mimic Gartman and buy the ETF, while using a tight stop-loss of several percent, he said.
Investors should be careful buying Chinese stocks, Nathan added. The Shanghai Composite is trading near 3,700, with important support near 3,400. If that level fails to hold, the index could decline another 10%, he explained.
Turning to General Motors (GM - Get Report), shares slid 1.7% on the day and are now down 6.5% on the year. Finerman says she likes CEO Mary Barra and finds the company's valuation attractive, but because the stock fails to trade with any bullishness, she's avoiding the automaker.
For their final trades, Najarian is buying Eli Lilly (LLY - Get Report) and Nathan said to buy the iShares 20+ Year Treasury Bond ETF (TLT - Get Report). Finerman said not to buy Weight Watchers International (WTW) and Adami is buying Bristol-Myers Squibb (BMY - Get Report).