Word On The Street
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Energy Trade
Ratigan moved the conversation into the energy sector. Adami pointed out that Baker Hughes (BHI) is now trading at 9 times forward earnings and trades near a 52-week low. He also likes Schlumberger (SLB) which he mentioned is trading at trough valuations. “I think you will wish you owned these stocks come December,” he said. Adami mentioned that FedEx (FDX) raised their first-quarter guidance but he wouldn’t buy the stock here. Najarian told viewer to look at the rails if they want to play transportation. He said UBS upgraded Burlington Northern (BNI) and Norfolk Southern (NSC) today.
Biotech Talk
Ratigan switched gears and moved the discussion to the biotechnology sector. Najarian said it’s very odd that ImClone Systems (IMCL) wouldn’t disclose who offered them $70 a share to take over the company. Adami said Celgene (CELG) is cheap at these levels. Finerman mentioned she is long Genentech (DNA). Najarian said he noticed heavy call options trading on Genentech today.
Technology Take
Ratigan moved the talk towards the technology sector. Macke said Research In Motion (RIMM) looks fine. Adami expressed concerns over the rally in Texas Instruments (TXN). He said the run higher in TXN was disappointing when you consider the quality of the news. The “Chart of the Day” was Google (GOOG). Najarian explained that the chart for Google is broken and there is no need to get in front of this southbound train.
Options Action
Najarian highlighted heavy options action in Kroger (KR). He said 22,000 calls traded on the stock today with 11,000 trading on the September 30 calls. He believes the stock is heading higher.
Fleckenstein Chat
Bill Fleckenstein, of Fleckenstein Capital joined the traders to discuss the financial stocks. He thinks Lehman Brothers is still in trouble, but an even bigger problem might be with Washington Mutual. “If I was going to short anything financial right now it would be credit card companies like Capital One (COF),” he added. He thinks the big problem right now is that we have a recession that’s going to get worse, and things won’t get better until people realize this. Fleckenstein said he sees more downside for some technology stocks like Research In Motion. “The new flip-phone is no big thing,” he added.
Financial Winners
The traders discussed some winners in the beaten-up financial sector. Adami thinks Jefferies, Knight Capital (NITE) and Raymond James (RJF) will be the winners. Macke said stick with Ameritrade (AMTD). Najarian recommended Ameritrade Morgan Stanley (MS) and U.S. Bancorp (USB).  Finerman said she still likes Goldman Sachs Group.
Lower Energy Trade
The crew looked at some ways to trade falling oil and gasoline prices. Macke thinks Las Vegas Sands (LVS) could be a buy on the dip with prices at the pump going lower. Najarian explained that Target (TGT) and Kohl’s (KSS) have been trading with the movements in crude oil. He likes Wal-Mart (WMT), Costco (COST) and Macy’s (M) if oil can crack through $100. Finerman mentioned she is short Kohl’s here because the stock has made a huge run. Adami said look to buy Gap (GPS) around $17. He also likes Urban Outfitters (URBN) for its high short interest.
Gold Lows
The traders discussed the gold trade with Jeffrey Christian of the CPM Group. Christian said in the physical market he sees net buyers, but traders are selling in the paper markets for futures and options. He thinks investors will continue to look to diversify their portfolios into the euro and gold. He believes the gold chart isn’t broken and is bouncing off the upward trendline around 770-780 per ounce.
Trader Radar
Shares of Whirlpool (WHR) were among the most actively traded stock on the NYSE today.
Technical Trades
The traders discussed two stocks that are making significant technical moves. First up was natural gas distributor Piedmont Natural Gas (PNY), which is breaking out to a new high. Najarian said he would be hesitant to jump in now on the breakout. Next was Newmont Mining (NEM), which hit a 3-year low. Adami told viewers to watch NEM here because the stock reversed after hitting the new low.
POPS- IBM (IBM) added 2%. Najarian said it’s trading higher off a Hewlett-Packard (HPQ) upgrade from yesterday. ExxonMobil (XOM) climbed 5%. Adami thinks the stock still goes up from here and the current valuation is cheap. International Rectifier (IRF) popped 6%. Finerman said she likes this stock. Honda Motor (HMC) moved up 5% Najarian says it looks from a valuation basis versus General Motors (GM). Micron Technology (MU) surged 11%. Adami told viewers to avoid this stock. American Eagle Outfitters (AEO) jumped 4% higher. Banc of America upgraded the stock to buy from neutral. Finerman mentioned she sold some AEO today. American Axle & Manufacturing (AXL) rose 6%. “A big $25 billion auto industry bailout helped guys,” Adami said.
DROPS- Sirius XM Radio (SIRI) plunged 14% after the satellite radio company said it might have to tap credit markets to pay off $300 million in debt due in February. Macke said the company is broken stay away. Boeing (BA) dropped 3%. Finerman didn’t have anything significant to add. Casino stocks like Las Vegas Sands (LVS) traded lower by 10% and Wynn Resorts (WYNN) fell 3%. Macke said at some point all the bad news will be in the casino stocks. Synovus Financial (SNV) fell 2% after the bank cut 650 jobs and slashed its dividend. Macke said it’s a “regional” and it’s a “bank” why would you not sell it.
Final Trade
Macke said short gold. Adami selected Celgene. Najarian went with Kroger.
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