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'Fast Money' Recap: Rally Time

Stockpickr Staff

11/30/07 - 09:21 PM EST
The stock market saw its best 4 days since March 2003 this week. The Dow finished Friday up 59 points and the S&P 500 closed up 11 points. The crew at CNBC's "Fast Money" took a close look at what motivated the rally, as well as raw materials and upcoming analyst days.

Karen Finerman was very impressed by the rally this week and she thinks liquidity is returning. Pete Najarian loves that money is returning to the market after both Citigroup(C) and E*TRADE(ETFC) received cash infusions this week. However, Tim Seymour doesn't think we are out of the woods just yet, but liquidity might be on the way. Guy Adami would be happier if the S&P 500 could close above 1490.

Leading technology stocks failed to participate in the rally Friday. Najarian thinks profit taking is coming into tech leaders like Google(GOOG), Research In Motion(RIMM) and Apple(AAPL). He recommends selling into the strength on these names. Dennis Gartman disclosed he sold his Apple position Friday and bought Potash

Raw Material Trade

Some material names like United States Steel(X) broke out this week as the dollar stabilized. Previously, material names would trade higher as the currency depreciated. Seymour explained that steel prices are at 9 month highs while inventories are at 9 year lows. He went on to say that U.S. steel exports look cheap around the world and resource companies are back in play. Seymour thinks the BHP Billiton(BHP) and Rio Tinto(RTP) merger will get done. Adami says Goldman Sachs upgraded the steel sector this week and he thinks United States Steel is going to $115.

Oil traded down 2.5% and closed at $88.71. Adami predicts oil will trade down to the mid-80's. He advised looking at refiner Tesoro(TSO) at $49 for a buy. Finerman is long TSO and continues to like the name. Najarian added that Bank of America upgraded two refiners, Valero(VLO) and Western Refining(WNR).

(Here's a look at a raw materials portfolio on Stockpickr.com Portfolio 10 Raw Materials.)

Analyst Day Preview

Analyst conferences can move stocks up when positive news is released to investors. A number of conferences are scheduled for next week. Najarian says watch Merck(MRK) on Tuesday, Bristol Meyers(BMY) on Wednesday and Eli Lilly(LLY) on Thursday. He would also keep GMAC(GMA) on the radar screen as a play off of the Bank of America credit conference on Monday. Najarian thinks Eli Lilly is the best upside trade going into next week's conferences.

China Trade

China's stock market has been the hottest market on the planet for the past year. Some market experts think China has gotten ahead of itself. Seymour predicts the next major trend in China will be mergers and acquisitions. Based on this, he likes China Mobile(CHL) and Aluminum Corp. of China(ACH) as long term trades as these firms look to grow through acquisitions. He also recommends that investors look for smaller Chinese energy stocks that could be the next target for PetroChina(PTR). Seymour, Adami and Najarian all think China Mobile is the best idea.

(Check out this list of Chinese stocks on Stockpickr.com China Focus Portfolio.)

Word on the Street

Homebuilders exploded higher Friday as market players look for a possible rate cut at the next Fed meeting. Finerman warns investors to stay away from the homebuilders with balance sheet problems. Seymour doesn't like Beazer Homes(BZH) which could be facing an SEC investigation. Adami thinks the best trade of 2008 will be Home Depot(HD).

Retail stocks saw positive gains for week after "Cyber Monday" posted a record $733 million in sales. Finerman likes Children's Place(PLCE) and Wal-Mart(WMT).

Drug stocks were higher after Merck(MRK) had great week. Najarian explained that the Goldman upgrade of the drug stocks helped Merck. In Adami's opinion, the trade is GlaxoSmithKline(GSK).

Google adds GPS-like features to maps software and enters the FCC auction to bid on the remaining wireless spectrums. Najarian expects that Google is going to use the towers from the wireless spectrums to get into the GPS business. Finerman thinks this could be a threat to Garmin(GRMN) if it materializes.

Pops & Drops

This POPS&DROPS segment highlights stock moves for the entire week.

Pops - Apple(AAPL) traded up 6% for the week. Najarian suggests that investors can still get into this stock without overpaying.

Boeing(BA) traded up 3% after the airplane producer said orders will beat last year's record. Adami predicts that $90 is the low on BA.

American International Group(AIG) traded up 9% off of bullish comments out of Wachovia. Finerman is cautious due to Maurice Greenberg, the largest AIG shareholder.

Emerging Market(EEM) traded up 5% as global markets rebounded. Seymour remarked that this is Yale's sixth largest holding in the Yale Endowment.

Merrill Lynch(MER) traded up 5% and Najarian believes the financials are back for now.

Banco Bradesco(BBD) traded up 11%. Seymour pointed out they just opened up some branches on the east coast.

NVIDA(NVDA) traded up 4%. Adami suggests Intel(INTC) could buy out NVDA.

Solarfun Power Holdings(SOLF) exploded up 50%. Najarian says these guys crushed their earnings.

Staples(SPLS) traded up 15% after the CEO said traffic in the stores is robust. Seymour mentioned that Staples beat earnings and Goldman Sachs upgraded the stock.

Drops - Big Lots(BIG) fell 11% after the retailer said third-quarter sales were down. Finerman pointed out that the earnings were terrible.

Tiffany's(TIF) fell 3% after the luxury retailer said U.S. sales slowed. Adami congratulated Dennis Gartman who was short Tiffany's.

Final Trade

The team ends the week with their best trades for the viewers.

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