The Dow closed up 76 points on Wednesday as the strength from the Federal Reserve rate cut continued to spill over for the bulls. The team at CNBC's "Fast Money" begins to look beyond the Fed decision and explores trade opportunities with this positive momentum.
Pete Najarian states that investors should look at the volatility in the S&P 500, which is moving back to normal. However, Jeff Macke says that market bears are instant messaging him with more short ideas than any other time in his most recent memory. Guy Adami predicts that Friday could be a funky day with options expiration on tap.
Speaking of Options
Najarian is seeing unusual options activity on
. He points out that option players are buying a ton of September $35 calls, which could signal a takeover before the end of the week. He also noted that the rumored buyer was
Take: Dan Fitzpatrick said recently, "Cree is poised to break out from a short-term "flag" pattern." To read more on what Fitzpatrick said,
A new segment launched on Wednesday called "Adami's Analysis." Adami took a trip to the UPS Center in New York City to find out what is going on at the packaging giant. Adami likes
for the following three reasons: international growth, energy hedging and union contracts. He went on to explain that UPS hedges against energy by giving their drivers routes that only allow for them to turn right the entire time.
On Sept. 14, a Credit Suisse analyst rated the stock an outperform. Adami also predicted that
will rally on Thursday and investors should sell into the strength. (
Take: Andrew White said recently, "As estimates have declined -7% over the last three months, FedEx may (but not necessarily) negatively surprise." To read more on what White said,
Emerging Markets Trade
iShares MSCI Emerging Markets
hit a record high on Wednesday. This action prompted Merrill Lynch to tell clients that this is the last great buying opportunity for emerging markets. Is it time to get in?
Tim Seymour, of Red Star Asset Management, joined the crew to discuss the emerging market trade. Seymour explained that stocks around the globe shot up after the Fed cut rates.
He feels many of these markets are up too much to jump into right here. Seymour suggests investors buy
on speculation of a takeover. Najarian asked Seymour for some liquidity plays in emerging markets and he pointed him to Russia via
The Old Soft Shoe
Shoe companies have been some of the hardest-hit stocks since July. Names like
Brown Shoe Company
have taken double digit hits.
Retail Reporter Margaret Brennan joined the crew to discuss how investors can play the shoe trade. Brennan recently spoke with the CEO of Payless and the company blamed the decline on weather and the increased demand for products out of competitor
. Finerman hates when companies use weather as an excuse, but she thinks investors can buy PSS, BWS and
Goldman Sell Call
Dick Bove, an analyst for Punk Ziegel, is the only analyst on Wall Street who is telling investors to sell
. Bove believes that the $700 billion in securities that GS holds are overvalued. He also feels that the hedge fund trading business is declining because fewer and fewer profitable products are being launched.
Bove maintains that GS will trade back to $160. Najarian remarks that if you have been long GS for the recent run then take half the position off in front of earnings. (
Take: Jordan Kahn said recently, "So I have to wonder if Goldman didn't make some bets of its own shorting some of this toxic paper, and squirrel away a few shekels as a result." To read more on what Kahn said,
Word on the Street
reported strong trading volumes for August. Najarian responds with a bullish outlook on the online brokers and his pick for a trade is
falls on rumors of higher taxes for Canadian oil sands producers. Dennis Gartman now says it's time to get out of Suncor and all his Canadian Tar Sands plays. Instead he would get into U.S. multi-nationals like
reported a rise in profits and reaffirmed guidance. Macke says you can buy
off the strong GIS quarter. (
Take: Ron Thomas said recently, "In my opinion, there are two big concerns preventing General Mills stock from discounting a high-single-digit growth rate." To read more on what Thomas said,
hit a 52-week high ahead of its earnings call scheduled for Thursday after the market close. Najarian sees no options activity in ORCL ahead of the quarter. (
Take: Jay Somaney said recently, "I am expecting Oracle to beat guidance for the August quarter and also raise guidance for the November quarter." To read more on what Somaney said,
Pops & Drops
trade up 3% after bullish comments from the CEO. Finerman remains apprehensive on the stock.
popped 5% on the thinking that the rate cut will bring back cheap money for private equity. Adami says take profits.
Fortress Investment Group
traded up 9% for the same reason that BX went up. Finerman says take profits.
The Warnaco Group
exploded up 15%. Najarian respects the move based on it's decision to shed parts of the company.
fell 15% after cutting full year forecasts and lowering sales estimates. Macke predicted this drop recently and said the trade is done.
fell 3%. Finerman warned investors against shorting the cable firm.
Sirius Satellite Radio
both fell 4% after UBS analyst Lucas Binder said the merger is in the stock price. Macke has a negative opinion about the downgrade and instead he is bullish on the names.
The crew wraps up the show with their best trade ideas.
- Macke favors Oracle (ORCL) - Get Report.
- Adami says lock in profits in Goldman Sachs (GS) - Get Report ahead of earnings.
- Najarian highlighted Titanium Metals (TIE) for the upside options activity.
- Finerman says play Victoria Secret with Limited Brands (LTD) .
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