'Fast Money' Recap: Coal's on Fire

The trading panel discussed various ways to play the coal space, which is heating up.

Author:: David Tong
Publish date:: Mar 16, 2010 7:40 PM EDT

NEW YORK (

TheStreet

) -- The markets rallied Tuesday after the

Fed

left the federal funds rate alone.

The

Dow Jones Industrial Average

rose 43.83, or 0.41%, to 10,685.98, while the

S&P 500

rose 8.95, or 0.78%, to 1,159.46. The

Nasdaq

was up 15.80, or 0.67%, to 2,378.01.

Pete Najarian said on

CNBC

's "Fast Money" TV show that investors are moving back into the markets looking for quality names with growth and those with dividend growth.

For a breakout of some stocks from a recent "Fast Money" TV show,check out Dan Fitzpatrick's "3 Stocks I Saw on TV."


3 Stocks I Saw onTV
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Joe Terranova said the market is seeing stocks that underperformed last year "coming back to the table."

Guy Adami, who has been bearish, said the market has offered opportunities to get into certain stocks. Case in point:

Tiffany's

(TIF) - Get Report

, which was up more than 4% today. However, he said it may be time to take some profits off the table on the stock.

Steve Liesman, a

CNBC

reporter, said the Fed may be a few months away from tightening rates after it loosens the language on interest rate increases.

Both Terranova and Tim Seymour agreed that the trend in the U.S. dollar is downward, putting risky assets in play. Terranova predicted crude, which was up today, is going to move higher to $90 a barrel and that the best way to play it is with the

U.S. Oil Fund

(USO) - Get Report

Najarian's pick in this space is

(BP) - Get Report

and its 6% dividend, huge cash position and moves into natural gas.

Seymour said the company to watch is

Exxon Mobil

(XOM) - Get Report

which has been underperforming but has a chance to take off if it can demonstrate some production growth.

Terranova mentioned two derivative trades off higher oil: the airlines and the ag trade, specifically

Potash

(POT)

In the coal space, Adami continued to like

Walter Energy

(WLT)

, while Najarian said he liked

Arch Coal

(ACI) - Get Report

. "Everything in the met (metallurgical) space is strong," Najarian said.

According to Najarian, if the coal trade is real, rail stocks like

Norfolk Southern

(NSC) - Get Report

, which has hit a 52-week high, are going to benefit.

Brian Kelly said a third derivative off the coal play is the growing demand for wood pellets. And he said the way to play that trend is to get into

Plum Creek Timber

(PCL)

Lee noted that China and the U.S. are locked in a testy debate on what some members of Congress have criticized as currency manipulation on the part of China with the yuan.

Dan Clifton, head of policy research at Strategas Research Partners, said the congressional rhetoric is going to give Treasury Secretary Tim Geithner leverage when he meets with the Chinese on the issue. He agreed with Seymour that a second hot issue is the threat of a trade war as the U.S. moves to levy more tariffs on Chinese goods.

Shifting back to the discussion of the general market, Steve Grasso said investors were selling off their winners and looking to move into laggards like

Nokia

(NOK) - Get Report

Costco

(COST) - Get Report

and

Wal-Mart

(WMT) - Get Report

Lee noted that chip stocks were leading the tech rally today. Najarian said the chip companies like

Intel

(INTC) - Get Report

are benefiting from the need to replace old chips. Adami said he liked

Western Digital

(WDC) - Get Report

in this space.

Lee brought in Scott Nations, president of NationsShares, to talk about the declining dollar. He said the dollar is going to weaken further, adding

PowerShares DB U.S. Dollar Index Bullish

(UUP) - Get Report

is starting to roll over. He said shorting the UUP is not the way to play it. Instead he said he would buy puts in UUP.

Shifting back to the health care reform bill, Clifton said the votes aren't there for passage. He said the Democratps are at least four votes short of what is needed. Terranova, though, said the market has taken the position it's going to pass.

Clifton said that if it bill fails, it could mean a sharp reversal for hospitals and Medicaid HMOs. He also said

Unitedhealth

(UNH) - Get Report

is well positioned to benefit regardless of the outcome of the vote.

In the final trades, Seymour liked

Alcoa

(AA) - Get Report

. Adami liked

Western Digital

(WDC) - Get Report

, while Terranova said to short

American Airlines