NEW YORK (TheStreet) -- The broader stock market rallied on Thursday, with the S&P 500 ETF (SPY - Get Report) climbing 0.45%, but the CNBC "Fast Money" traders had their focus on something else: Oil. West Texas Intermediate prices climbed 3.4% on the day, despite a larger-than-anticipated build in inventories.
Oil rallying on bad news? That's exactly the type of thing Brian Kelly likes to see. Kelly, the founder of Brian Kelly Capital, said investors looking to see a bump in oil prices are best off buying oil outright, via the United States Oil ETF (USO - Get Report). In regards to specific energy stocks, he like Exxon Mobil (XOM - Get Report) the most.
Steve Grasso, director of institutional sales at Stuart Frankel, says the current resistance in oil looks to be around $50. Investors who don't have faith in China's economy shouldn't buy oil, as the commodity will likely struggle without one of its largest importers showing an improving economy.
Investors who want to own energy stocks should stick with the refiners, Grasso added.
Guy Adami, managing director of stockmonster.com, seconded that opinion, saying investors can stay long Tesoro Corp. (TSO) above $95. He also likes airline stocks, specifically JetBlue Airways (JBLU - Get Report), which benefit from lower fuel costs.
Even if oil prices do rally up to $50 per barrel and stay there, it won't be good enough for large integrated oil companies likes Exxon Mobil and Chevron (CVX - Get Report), Adami said. Oil needs to get to around $75 for those companies to do meaningfully better.
Adami added that the oil volatility index stayed above $50 Thursday despite the big jump in oil prices, when the index should fall when oil rallies and vice versa. It could mean oil prices are setting up for another selloff, he said.
Investors looking to get long energy stocks should just stick with the Energy Select Sector SPDR ETF (XLE - Get Report), according to Dan Nathan, co-founder and editor of riskreversal.com. He likes this exchange-traded fund near $60 and he also likes Baker Hughes (BHI) below $50.
Robert Raymond, founder of RR Advisors LLC, says oil could be very close to a bottom. As long as supply continues to deteriorate due to lower credit lending, and if demand keeps pace, oil prices could rebound in 2016. He thinks the supply/demand imbalance could soon level out, which is a good thing for oil prices.
The risk, of course, is that oil demand falls or oversupply continues or both, he concluded.
In regards to the broader market, Carter Braxton Worth, head of technical analysis at Cornerstone Macro, doesn't see a pretty picture. The average sell-side analyst has a year-end price target of 2,205 for the S&P 500. This simply is not enough, he reasoned. Earnings and revenue both declined in the second quarter and valuations are not justified. "I'm a seller," he concluded, saying he expects a drop to 1,800 in the index.
Grasso believes a similar or larger drop is coming, and he expects most of the damage to materialize in October. However, following the big drop he expects a big rally at year's end.
It's a "no brainer," Nathan said, calling Apple the obvious pick. Apple makes better products when it comes to hardware -- Apple TV vs. Amazon Fire TV, for example. He expects Apple to outperform over the long term.
Adami, however, said investors should stick with Amazon. The company has a lot of levers it can pull and can increase its profits at will by reducing spending.
Grasso likes Amazon's profit-making abilities, too, but felt better about putting his money in Apple right now. Kelly agreed, saying he likes Apple for its share buyback and large cash hoard.