Word On The Street
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Technical Trade Ideas
Katie Stockton, chief market technician MKM Partners joined the show to discuss some technical trades. Stockton said from a technical standpoint she’s bearish on oil but bullish on gold at $945. She highlighted gold stock Royal Gold (RGLD) and said buy it on any pullback. Stockton said the chart for the Financial Select Sector SPDR (XLF) has traded above support and she also likes financial stock Wells Fargo (WFC).
Drop In Oil Trade
The traders talked about playing the drop in crude oil prices. Najarian said the run in General Motors (GM) is due to the fall in oil. Addison Armstrong, Tradition Energy Director of Market Research said if oil breaks support at $123.91 then were heading down $122.25, which is the 100-day moving average. He feels if oil breaks that level it’s heading to $115 and possibly $105 by October.
Insider Buying at Wachovia
The traders reported that Robert K. Steel, CEO of Wachovia (WB) purchased a million shares of his stock at $15.
Baidu.com Blowout
The traders discussed the blowout earnings number from Chinese search engine Baidu.com (BIDU). Shares of Baidu jumped 13% after the company reported an 87% spike in earnings to $38.6 million, vs. Wall Street expectations of $35.5 million. The traders said they wonder why Google (GOOG) and Yahoo (YHOO) are seeing a slowdown while Baidu is accelerating.
Casino Trade
Wynn Resorts (WYNN) reports earnings on Thursday. Macke said he would be a seller of the stock. He doesn’t think the rest of 2008 will be good for any casino that has exposure to Las Vegas. Terranova said sell Wynn between $105 and $110. Najarian pointed out that he noticed huge put option trading on Las Vegas Sands (LVS).
Option Explosion
Bill Brodsky, chairman and CEO of Chicago Board of Options Exchange, joined the traders to discuss the massive explosion in options trading volumes. He said its a perfect storm with a combination of technology, better spreads and investor education. Najarian said he loves trading options for their leverage. Finerman said she uses options for insurance. Macke recommends investors paper trade options before trying it for real.
POPS&DROPS
POPS- XM Satellite Radio (XMSR) and Sirius Satellite Radio (SIRI) traded up 10% on news that the FCC is close to approving the merger of the two firms. Macke said who cares at this point. PepsiCo (PEP) traded up 2% after the company beat analyst estimates. Terranova said get long with a stop at $58. Intuitive Surgical (ISRG) surged 18% after posting strong earnings. Najarian said its Da Vinci product is doing great. CEC Entertainment (CEC) jumped 24% after the Chuck E. Cheese operator reported strong earnings and raised its guidance for the year. Macke explained that pizza’s makers are rallying. Hershey (HSY) traded up 5% after the chocolate maker raised prices. Terranova said stay away. Whirlpool (WHR) popped 13% after the appliance maker posted strong earnings. Finerman said it was a relief rally due to short covering. Hertz Global (HTZ) shot up 7% ahead of its earnings report. Macke said the stock has been beaten-up.
DROPS- Boeing (BA) fell 4% after the airplane maker said earnings fell. Finerman said this quarter was bad. Zimmer Holdings (ZMH) lost 7% after the medical device company lowered its earnings guidance. Najarian said he was surprised at the news. Ryder Systems (R) dove 10% after the truck company lowered its 2008 forecast. Terranova said it’s better to play the ETF for the transportation sector.
Fast&Furious
Microsoft (MSFT) has an analyst meeting on Thursday. Finerman said she hopes they don’t announced any more bad news. Eli Lilly (LLY) and Bristol Myers (BMY) report earnings before the bell. Najarian said he doesn’t expect either to trade up much. Dow Chemical (DOW) reports earnings on Thursday. Terranova said its all about oil. 3M (MMM) is set to report earnings before the bell Thursday. Macke said he’s cautious on the name. Starwood Hotels (HOT) is set to report earnings before the bell. Najarian said don’t touch it unless you think it’s a takeover target.
Trader Radar
Shares of AT&T (T) were among the most actively traded stocks on the NYSE Wednesday.
Final Trade
Najarian said buy Applied Materials (AMAT) for a play on solar. Finerman told investors to avoid ethanol stocks. This thin film photovoltaic (TFPV) SOLAR CELL manufacture may be the next FSLR! Read the free research report available today