Traders Plays
Dylan Ratigan asked the traders if they are any more confident to buy stocks today than any other day this year. Pete Najarian said yes. He advised viewers to consider Morgan Stanley (MS). He also disclosed he added to his put position in Lehman Brothers (LEH). Jeff Macke said he likes Wal-Mart (WMT), which broke out technically today. Guy Adami mentioned that Church & Dwight (CHD) and Johnson & Johnsong (JNJ) continue to work.
Housing Trade
Ratigan switched the conversation to the housing market. Macke said if he was long any homebuilding stocks right now he would be taking profits. Adami pointed out that the 30-year mortgage rate went from 6.5% to 6% today. He likes Home Depot (HD) for a play on the housing recovery. Finerman said if you want to play in the housing sector buy something like MDC (MDC) or Centex (CTX) that isn’t over leveraged. Najarian explained that the homebuilding stocks have been moving higher because of the high short interest in the sector. Macke and Najarian both agreed that the homebuilders are trading vehicles only.
Financial Stock Picks
Ratigan brought up a report out of the Financial Times that said subprime king and hedge fund manager John Paulson told investors he’s looking to get more involved with the financial sector. Finerman said she likes the idea and she would take a look at Fannie Mae (FNM) preferred stock, General Electric (GE) and Citigroup (C). Adami mentioned that U.S. Bancorp (USB) is close to an all-time high. Najarian said the cream of the crop in the financial stocks is JPMorgan (JPM), U.S. Bancorp and Wells Fargo (WFC).
Tech Take
Ratigan moved the talk to the technology sector. Adami pointed out that the chart of Research In Motion (RIMM) is broken. “If you’re long RIMM you should buy some puts and sell an upside call,” Najarian added. Finerman thinks Google (GOOG) is getting close to a value play when you look at the P/E level Najarian pointed out that Google traded twice its average volume today, which could be a sign of a bottom for the stock.
More Financial Talk
FBR analyst Paul Miller joined the traders to discuss the financial sector. Miller thinks the bank stock rally is a step in the right direction, but he is worried about what will happen during the fourth-quarter. I think the financial rally has more room to go and will extend for a couple of more weeks, he added. However, Miller is worried that any bank with a large amount of level 3 assets like Wachovia (WB), could be the subject of an audit in the fourth-quarter.
Socialist Trade
The traders discussed ways to trade the government’s new move towards socializing companies. Adami explained that Gap (GPS) has figured out a way to get their gross margins up 4% and their operating margins up 10%. He thinks when we come out of the credit crisis the retailers will do well. Finerman thinks the government intervention in Fannie Mae and Freddie Mac is bearish for the equity of General Motors (GM) and the airline stocks.
Opec & $100 Oil
Joe Terranova joined the crew to discuss the chances of OPEC allowing crude oil to trade down to $100 a barrel. He said right now OPEC is over supplying the market. He said if OPEC doesn’t get what they want it’s possible they will cut production at the December meeting. He thinks the refiners could be a trade here, but the market is so crazy it’s a tough call. The bottom line from Terranova is the United States Natural Gas Fund (UNG) and the United States Oil Fund (USO) isn’t the way to trade crude oil right now.
Technical Talk
Oppenheimer chief market strategist Carter Worth joined the traders to discuss his call to sell the bounce in a note to clients today. Worth explained the volume wasn’t near record levels and the semiconductors didn’t even participate. He said he was surprised the Dow wasn’t up 1000 points off the Freddie Mac and Fannie Mae takeover news, and the fact it wasn’t shows the market is weak. Worth said the only stocks working today were the same “loser stuff” and not names like Google and the chip stocks.
Apple Music
Piper Jaffrey tech analyst Gene Munster, joined the gang to discuss Apple Computer’s (AAPL) ahead of the company’s meeting set for Tuesday. Munster said it will be music based announcement around the iPod Touch or iPod Nano. Munster said the meeting doesn’t mean much because the iPod is the least significant of the company’s three business segments. He feels the meeting has more to do with Steve Jobs. “I am confident that Jobs will be at the meeting and looking healthy,” Munster said.
POPS&DROPS
Pops- Citigroup (C) traded up 6%. Adami thinks Citigroup can run another day or two. Walt Disney (DIS) popped 5%. Macke disclosed he is long the stock.
Drops- UAL (UAUA) plunged 11% after the Sun-Sentinel published a 6-year-old article that said the airline was filing for Chapter 11 bankruptcy. Finerman said stay away. United States Steel (X) dropped 5%. Najarian explained that the market is worried that they will have to drop steel, due to the drop in scrap metal. Oracle (ORCL) fell 4%. Adami mentioned that Pacific Crest lowered its earnings estimates on the name. He thinks the stock is interesting here on a valuation basis. Google (GOOG) slipped 5% after three different analysts issued negative reports surrounding the search giant. “They have one great killer application and nothing else,” Macke said.
Trader Radar
Shares of Home Depot (HD) were among the most actively traded stocks on the NYSE today.
Final Trade
Macke said buy Research In Motion (RIMM) at $100 and stop out at $95. Adami picked Urban Outfitters (URBN). Finerman recommended Flowserve (FLS). Najarian selected Novo Nordisk (NVO). Join the fastest growing community of small cap investors at Stockhideout.com