Word On The Street
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Tech Trade
Research In Motion (RIMM), Apple Computer (AAPL) and Oracle (ORCL) all dropped large on Thursday with RIMM and ORCL falling after reporting earnings Wednesday night. Najarian advised investors to short technology with the UltraShort QQQ ProShares (QID).
Pairs Trades
The traders talked about some paired trade ideas. A pairs trade is where an investor goes short a stock and then long another stock in the same sector or that are related in some fashion. Terranova said market players should look for pairs trades with a theme. He said he was long JP Morgan (JPM) and short consumer finance play Capital One (COF). His theme was a struggling consumer in the finance area versus a stronger money central bank. Finerman explained that investors shouldn’t think they’re lowering risk with pairs trades. Adami said pairs trading is confusing and can add more risk.
Stocks Unfairly Down
The traders discussed which stocks were unfairly punished in Thursday’s market blood-bath. Najarian he was surprised that ConocoPhillips (COP) traded down. Finerman said she is looking at Merck (MRK). Adami mentioned that L-3 Communications (LLL) hit a 52-week low. He feels LLL has been unfairly downgraded recently. Terranova said he’s bullish on Nucor if the selling pushes the shares to the high $60’s or lower $70’s.
Bill Fleckenstein Plays
Perma-bear Bil Fleckenstein joined the traders to discuss how he’s playing the current market. Dylan Ratigan mentioned that Fleckenstein last appeared on “Fast Money” when the Dow was 14,000 and he told investors to sell. Fleckenstein said that he expects real estate to get worse, stocks to get worse and the economy to get worse - and tech stocks are the next sector to go down. Fleckenstein mentioned that Tech is GDP sensitive and its going to get weaker. He cited falling cell phone sales in Western Europe, the U.S., China and India as reason to be bearish on technology. Fleckenstein disclosed he is short tech stocks like Texas Instruments, Cisco (CSCO) and IBM (IBM).
POPS&DROPS
POPS- Bed Bath & Beyond (BBBY) traded up 4% after the company announced it hired a new chief medical officer. Adami said there is a large short interest in the stock. Davita (DVA) popped 2% after the company announced it hired a new chief medical officer . Finerman said the company is recession-proof. Novo Nordisk (NVO) added 3% after Credit Suisse issued a report that said obesity is on the rise. Najarian said nice pop. Photon Dynamics (PHTN) soared 31% after the company recived a takeover offer from Orbotech (ORBK). United States Natural Gas (UNG) jumped 3%. Terranova said the stock could pullback.
DROPS- Monsanto (MON) fell 3%. ConArga Foods (CAG) dropped 5% after the company forecasted earnings below Wall Street estimates. Terranova said high commodity costs are of concern. MGM Mirage (MGM) lost 6% after JP Morgan cut its rating on the stock from overweight to neutral. Finerman said it’s a tough sector to be in. Brunswick (BC) fell 4% after the company said demand for its products is down. Terranova said the company is operating in a bad environment. Oshkosh (OSK) plunged 33% after the truck maker said it will report a loss for the third-quarter. Adami said the stock has more room to go down. Lear Corp (LEA) dropped 16% after Goldman Sachs cut its rating on the stock to sell from neutral. Adami said the stock looks interesting from a valuation perspective.
Trader Radar
Shares of Discover Financial Services (DFS) were among the most actively traded stocks on the NYSE Thursday.
Final Trade
Terranova said get long Suncor Energy (SU). Adami picked Allstate (ALL). Finerman likes Merck (MRK). Najarian recommended buying put options on the Semiconductor HLDR (SMH). Get the scoop on tomorrow’s hottest trade ideas – TODAY! BeaconEquity.com PREMIER PICKS have an amazing track record. Join this select group and ride the profit wave!