Commodity stocks helped to push the market lower on Tuesday with gold and oil dropping to levels last seen in August. The team at CNBC's "Fast Money" kicked off the show discussing this turn of events and which parts of the market were hot.
Pete Najarian and Guy Adami both believe the commodity stocks are just seeing profit taking but not rolling over. Adami adds that gold is looking like it's topped out. Guy Adami would take profits in oil names like
. Jeff Macke suggests the change is due to dollar strength and when the dollar is strong, oil and commodity stocks will be weak.
The homebuilding stocks traded higher, shaking off the worst pending home-sales numbers in history. Adami likes
for a trade. He sees the stock going to $29.50, but urges traders to use a stop at $24.50.
Finerman advises investors in housing stocks to take some off the table. She comments that many market players believe the housing stocks have hit bottom, but she isn't convinced of that.
To Macke, these stocks are trades and not investments, unless your time horizon is five years. (
Take: Jim Cramer said recently, "Take KB Home: 73 million shares trading, 20 million shares short." To read more on what Cramer said,
Bank of America
also traded higher as speculation of a credit crisis ending continues to help the financials. Adami sees a trade opportunity in
, pointing out that Warren Buffett has been adding to his position in USB recently.
Macke warns against shorting the financials because he believes the sector will continue to work on the long side. Before earnings, Macke also likes
Wii has been on fire with consumers who love to play video games. Now tennis giant Prince is launching a new mini racket that will be available for use with the Wii.
Sports Business Reporter Darren Rovell joined the crew to discuss the hot new product and Nintendo's future.
Rovell told viewers that the racket will cost $14.95 and will be sold at Circuit City. He notes that Wii tennis is the best game going for Nintendo. Macke isn't so sure that the racket will generate a huge amount of revenue for Prince.
In Macke's opinion,
make more money off the games for the Wii than games for the Playstation, primarily because they're less complicated for the Wii.
He suggests buying Electronic Arts, which he currently owns, as well as Activision and
on pullbacks. Activision just hit a 52-week high.
Looking for more computer gaming picks? Check out this portfolio on Stockpickr: Video Game Index
China Continues to Charge Ahead
iShares FTSE/Xinhau China 25 Index
traded higher for the second day in a row even though the Chinese stock market is closed on holiday for the rest of the week.
Najarian reminds U.S. investors that they can trade China ETF's and ADR's even when the market in China is closed. Although it has had a monster run, he still believes that
will trade higher. Najarian owns BIDU.
He also likes the Macau trade with
Las Vegas Sands
. Finerman disagrees with Najarian. To her, China is very "toppy" here and she is seeing too much irrational action. (
Take: Mark Manning said recently, "In fact, the iShares China 25 Index Fund is up more than 50% since the correction in August. Although there may be more upside left in this type of parabolic move, it cannot last forever. These types of moves are like a runner sprinting up a large hill -- eventually they will quickly lose steam." To read more on what Manning said,
traded lower after hours on a $158 million loss. Najarian believes the run in Micron has already happened. He prefers
and feels both have more upside potential. Adami disagrees and believes that Micron will trade higher from current levels.
Pops & Drops
Pepsi Bottling Group
traded up 2%, hitting an all-time high. Adami likes PBG and thinks this stock is cheaper then
traded up 9% as takeover rumors swirl and the CEO has left the company. Najarian believes PDLI is undervalued and he has owned this stock for the last two weeks.
popped 2% on news the firm is going to increase the number of stores by 67%. Finerman likes Kohl's management and the stock.
traded up 9% on a bullish gross margin forecast. Najarian is kicking himself for missing this hot stock.
fell 7%. Finerman sees Garmin's only solution is to buy
and she is long NAVTEQ.
The team takes questions from the viewers.
Bob from New York writes, "We have seen a big run in
Las Vegas Sands
. Will Macau continue to expand or get oversaturated?" Najarian responds that
looks better then Las Vegas Sands. (
Take: Jim Cramer said recently, "That's right, this secondary will give Wynn money galore to do some more building in Macau or make the casinos look and feel better, something that Steve Wynn has been emphasizing." To read more on what Cramer said,
Dean from New York comments, "I love your show. I feel you haven't focused enough on contrarian opportunities though. There are plenty of fantastic real estate companies and trusts that have unfairly been beaten down since August and, while the rest of the market has recovered, they have lagged.
One such company is
CB Richard Ellis,
which has fallen from $42 and is now trading at $28. Don't you think that as diversified and as global a business should continue to grow at a healthy pace?" Adami concedes that CB Richard is OK for a trade with a stop at $24.
Shibu from New Jersey writes, "I've made some serious fast money on some trades but haven't pulled the trigger on some others. For example
Research In Motion
. Do I sell this tech-heavy basket now or wait until just before their individual earnings?
Macke believes it's a good idea to take some off the table in these momentum names. He urged Shibu not to be greedy. (
Take: Chris Versace said recently, "So the season for mobile phones is upon us once again. Aside from the continued hoopla around Apple's iPhone -- well-deserved, I might add -- the second half of the calendar year historically has been the seasonally strong sales period for mobile phones." To read more on what Versace said,
The team signs off with their best trades for the day.
- Macke likes Johnson & Johnson (JNJ) - Get Report.
- Finerman recommends Kohl's (KSS) - Get Report.
- Adami is drawn to the action in Dean Foods (DF) - Get Report. (RealMoney Take: Jim Cramer said recently, "Dean Foods will keep stumbling. They did the dumbest leverage re-cap I have ever seen." To read more on what Cramer said, click here.)
- Najarian prefers PDL BioPharma (PDLI) - Get Report, a stock he owns and thinks could see a takeover.
Stockpickr is a wholly owned subsidiary of TheStreet.com.