Friday, January 16, 2009

What stock(s) did Fast Money trader Joe Terranova recommend Thursday to play a gasoline price bottom?


CNBC Bonus Bucks Trivia
CNBC Million Dollar Portfolio Challenge
Squawk Box

Question: What stock(s) did Fast Money trader Joe Terranova recommend Thursday to play a gasoline price bottom?

Answer: Valero
Subscribe to EF Hutton via Email

Follow EF Hutton on Twitter

Terranova "Gasoline Prices Bottomed"

Do lower crude prices mean lower prices at the pump?

Not necessarily, oil prices fell more than 5 percent on Thursday however the average price for a gallon of gasoline in the United States has risen for the first time since early July.

The national average for self-serve, regular unleaded gasoline rose to $1.7793 on January 9, up some 11.71 cents.

And Fast Money’s Joe Terranova thinks prices at the pump are going higher from here. “The crack spread used to be minus 2 dollars, now it’s 7 bucks,” he says.

How should you trade it?

“The trade is to own the refiners,” counsels Terranova. “Own Valero and Sunoco . They have good balance sheets and are not that reliant on credit.”

And it's worth noting, that although gasoline prices are higher, they are still less than half of what consumers paid in July when the average price reached an all-time high of $4.11 a gallon.