Fast Money Recap: Bad News Is Good News

Bad news gets turned into good trade ideas.
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More bad news about the worst housing market since 1970 still couldn't bring down the stock market on Thursday. The team at CNBC's "Fast Money" noted all of the reasons to go down and why the market didn't.

Guy Adami says he's finally warming up to

KBH Home

(KBH) - Get Report

, and suggests buying it with a stop at $23.50. Karen Finerman said to look at the homebuilders for a trade here. (

RealMoney

Take: Andrew White said recently, "Perhaps, KBH's dead cat bounce has arrived? Technicals have improved in the last week despite share price declines and

Fed

cuts. That said, 20% downside to support cautions any buyers focused more on 8% and 20% upside to resistance." To read more on what White said,

click here.)

The Pentagon announced a stunning budget request for $190 billion for 2008. On this news, Adami would buy

Boeing

(BA) - Get Report

,

Lockheed Martin

(LMT) - Get Report

and

General Dynamics

(GD) - Get Report

. However, he did mention that BA is getting a little rich in valuation. (

RealMoney

Take: Jim Cramer said recently, "... today's ramp has been perfect for the bull markets of infra

refineries and petro plants, ag

energy, alt, minerals

if demand is strong for oil that means things are robust enough to buoy oil and aerospace defense

reduced energy costs/Boeing)." To read more on what Cramer said,

click here.)

Tropical storm Lorenzo nears the gulf coast causing crude oil to march higher on Thursday. Pete Najarian points to the oil service sector leading oil higher. He advises playing

Baker-Hughes

(BHI)

,

Schlumberger

(SLB) - Get Report

and

Halliburton

(HAL) - Get Report

.

Adami noticed the crack spread coming in, and refiners are his ideal play, especially

Tesoro

(TSO)

. (

RealMoney

Take: Daniel Dicker said recently, "A tremendous move in the relationship between crude oil and gasoline prices could be giving us an opportunity in the refinery stocks like Tesoro." To read more on what Dicker said,

click here.)

Shipping Trade

Crude tanker stocks have been rising dramatically with oil trading north of $80. Rates for bulk and dry shippers have gone up 350% according to Najarian. All the dry shippers like

DryShips

(DRYS) - Get Report

are on fire. Adami commented on the cheap valuation on DRYS. Najarian also says to keep an eye on oil shipper

Nordic Tanker

(NAT) - Get Report

and he mentions that NT sets rates off the spot crude price and Nordic has yet to move.

Chartology With Dennis Gartman

Dennis Gartman, author of

The Gartman Letter

joined the crew to discuss his take on commodities. Gartman says don't fight the Federal Reserve when it's cutting rates. The regional banks will benefit from a rate-cutting environment. Jeff Macke agrees with this thesis. Gartman says think of your local bank for trade ideas.

Gartman feels the current Federal Reserve is more proactive than Feds of the past. Gartman feels oil is going higher and he tried to short oil but was wrong for one day. He would buy oil drillers as a way to play the crude boom. Gartman loves the chart on gold and feels its going much higher by year-end. His favorite position right now is being long wheat. He likes

Market Vectors ETF

(MOO) - Get Report

for a play on wheat even though he admits it isn't a pure play.

Word on the Street

Financials helped lead the market higher even with many market participants questioning

The New York Times

report on Warren Buffett buying a stake in

Bear Stearns

(BSC)

. To see all of Buffett's holdings,

click here

.

Macke comments that a lot of people are still betting against the financials and could be wrong. Najarian agrees that financials are strong. Adami wouldn't buy BSC for a value trade. (

RealMoney

Take: Jim Cramer said recently, "But Bear should have been down big today. It isn't. Worth noting." To read more on what Cramer said,

click here.)

EchoStar

(DISH) - Get Report

traded higher after an Oppenheimer analyst said

AT&T

(T) - Get Report

might make a bid for the satellite firm. It's a rumor that Macke doesn't buy, but he likes DISH anyway. Najarian mentioned the aggressive options buying in DISH.

Palm

(PALM)

made headlines with plans to release a new $99 Centro smart phone. Macke likes PALM for the first time and is changing his tune and calling it a buy. In his opinion, the company did two smart things by getting rid of the Folio product and introducing Centro. (

RealMoney

Take: Tero Kuittinen calls Palm's phone an oddball but shrewd strategy. To read more on what Kuittinen said,

click here.)

China hit the news on Thursday with Shenhua Energy raising $8.9 billion and talk that

PetroChina

(PTR) - Get Report

might raise $5 billion. Najarian cautions investors to be careful with

iShares FTSE/Xinhua China 25 Index

(FXI) - Get Report

, which doesn't have a lot of diversity. Adami advises takinge some profits on

China Mobil

(CHL) - Get Report

.

Focus Media

(FMCN)

traded higher after hours on solid earnings. Najarian maintains that this is a situation where you buy the news and sell the story. He also pointed out that the options were on fire Thursday.

Wal-Mart

(WMT) - Get Report

announced plans to expand its $4 generic drug program. Finerman likes WMT and owns the stock. However, Macke disagrees and prefers

Walgreen

(WAG)

.

Shares of

GameStop

(GME) - Get Report

fell after a UBS analyst downgraded the firm. If your time frame is two weeks, Macke says the downgrade makes sense. Instead, he feels right now is a good time to build positions in names like GME. Macke thinks GME will have a huge Christmas.

'Fast Money' Biotech Basket

Historically, the fourth quarter is a strong period for biotech stocks. Knowing this, "Fast Money" created a biotech basket to capitalize off the strength. Najarian offered up the basket, which includes

Myriad

(MYGN) - Get Report

,

Biogen

(BIIB) - Get Report

,

Isis Pharmaceuticals

(ISIS)

,

Amylin

(AMLN)

,

Genentech

(DNA)

and

Cepheid

(CPHD)

. Adami wants to add

Gilead Sciences

(GILD) - Get Report

to the basket as well.

Finerman suggests if investors don't want to take unique risk, then mutual funds are a good solution. Funds like

T. Rowe Price Health Sciences

(PRHSX) - Get Report

,

BlackRock Health Sciences A

(SHSAX) - Get Report

and

Vanguard Health Care

(VGHCX) - Get Report

are good choices.

Face2Face

The crew responds to viewer questions in the Face2Face segment.

Rod from New Jersey writes, "Is there an ETF or an options strategy I can use to trade the US dollar? Dylan Ratigan offered up a few ideas, which were

CurrencyShares Euro Trust

(FXE) - Get Report

for a play on the euro,

CurrencyShares Canadian Dollar Trust

(FXC) - Get Report

for a play on the Canadian dollar and

CurrencyShares Japanese Yen Trust

(FXY) - Get Report

for a play on the yen. Adami thinks the best way to play the falling dollar is buy

Hewlett-Packard

(HPQ) - Get Report

.

Theresa from California asks, "When calculating risk, how much weight should be given to the mystique a CEO carries, and the public perception that a company's success rides on that CEO's shoulders?

Apple

(AAPL) - Get Report

appears riskier to me for this reason, than

Research In Motion

(RIMM)

or

Garmin

(GRMN) - Get Report

.

Macke likes CEO's with a cult following.

Oracle

(ORCL) - Get Report

comes to mind with the cult aura surrounding Larry Ellison. (

RealMoney

Take: Richard Suttmeier said recently, "Oracle: At nearly 20% overvalued, profit-taking is merited." To read more on what Suttmeier said,

click here.)

Pops & Drops

Pops --

Micron

(MU) - Get Report

popped 6% after bullish comments on the firm out of Lazard. Najarian prefers

SanDisk

(SNDK)

and

Rambus

(RMBS) - Get Report

.

China Bak Battery

(CBAK)

exploded up 20% as the Chinese stocks continue to run. Najarian watched the big spike again today in CBAK. (

RealMoney

Take: Steven Smith said recently, "One name that has caught the momentum is China Bak Battery, which makes rechargeable batteries. It is putting together consecutive gap-higher days as shares are up another 25% today." To read more on what Smith said,

click here.)

BEA Systems

(BEAS)

traded up 2% after Carl Icahn spoke favorably of the firm on Wednesday night's "Fast Money." To see all of Icahn's holdings click here,

Carl Icahn

.

Drops --

Yahoo!

(YHOO)

fell 2%. Macke has taken a change of course and now favors YHOO.

General Motors

(GM) - Get Report

fell 3%. Macke says let it pull back because everything is fine.

Final Trade

The crew signs off for the day with their last trade ideas.

  • Macke advises buying Yahoo! and Palm.
  • Najarian goes long with Nordic American Tanker Shipping (NAT) - Get Report. He bought NAT Thursday and is putting his money where his mouth is.
  • Adami recommends buying KB Home (KBH) - Get Report.
  • The Finerman trade is Seacor Holdings (CKH) - Get Report.

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