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'Fast Money' Recap: Housing Comeback?

The trading panel discusses Home Depot, the housing numbers and whether the housing market is making a comeback now.
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NEW YORK (

TheStreet

) -- Melissa Lee kicked off "Fast Money" with the question of whether the housing market is making a comeback. It is what the market was betting on today.

Stocks finished higher for the third day in a row as data showing a surge in existing-home sales offset a downward revision in third-quarter GDP.

The

Dow Jones Industrial Average

rose 51 points, or 0.5%, to 10,465. The

S&P 500

added 4 points, or 0.4%, to 1118, while the

Nasdaq

improved by 15 points, or 0.7%, to 2253.

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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Lee began by asking how the Federal homebuyer tax credit is affecting

Home Depot

(HD) - Get Report

stock.

Pete Najarian thinks that Home Depot will win in every scenario right now. "It's in a sweet spot right now," he said.Najarian is looking at the suppliers as well, not just the homebuilders. They've all been approaching 52-week highs, he explained.

Bed, Bath and Beyond

(BBBY) - Get Report

could take more market share going forward, he said. "It's also the ancillary plays as well," he said.

Najarian looked at

XHB

(XHB) - Get Report

. "Those big bets across ETFs are paying off and moving the markets," he said.

Finerman says that homebuilder stocks right now are in an usual place. "They're very levered...there's more room to run," she explained. She finds Home Depot more attractive than

William-Sonoma

(WSM) - Get Report

: "You know I'm a value girl."

Meanwhile, Joe Terranova doesn't believe the housing numbers. He doesn't agree that home prices will continue to rise.

Jon Najarian says there's still more upside to the homebuilder trade. He's got his eye on

Ryland

(RYL)

and

KB Home

(KBH) - Get Report

.

"In 2002 the stocks moved dramatically from 18 to 45 bucks. We can easily see these stocks double," he said. "The table is set for these homebuilders to do very well."

On the topic of treasury notes, he sees a 4% rate by the middle of the first quarter.

Najarian still likes Home Depot and

Lowe's

(LOW) - Get Report

in the short-term, but for "the long-term 2010 play, I do like the homebuilders."

Gold and the Dollar

On the topic of the gold and the dollar, Terranova said that the dollar has been down all year. It has been in a cyclical downtrend, "but if you look...at Jan. and Feb., they're the two strongest months for the dollar. That's what investors are looking at."

The dollar is still above levels seen in March and August 2008, he said.

Adami maintains that gold has been down since

Barrick Gold

(ABX)

said it was done with its hedging program and the dollar is going to continue to rise.

Najarian turned his attention to coal names. He said coal continues to go higher like the dollar. He's enthusiastic about

Bucyrus

(BUCY)

, which received another upgrade.

WLT

(WLT)

is another name he's looking at. "I love coal names," he said. It's good to pay attention to coal names that are linked to met coal and coking coal.

Caterpillar

(CAT) - Get Report

, he said, could also be another bullish trade.

Getting Technical

Lee later said that

Red Hat

(RHT) - Get Report

had topped revenue numbers and Najarian subsequently added his opinion that the software space is the place to be, pointing out

Adobe

(ADBE) - Get Report

,

Oracle

(ORCL) - Get Report

and

Microsoft

(MSFT) - Get Report

.

Lee then went on to say that

TheStreet Recommends

Google

(GOOG) - Get Report

has crossed the 600 level and that Cramer is also bullish on it. Finerman thinks Google is a value play, pointing out its operating margins of 30% -- "gigantic," she said. About Google, she said that as the business grows, its profits are growing a lot more than Amazon, though Google is a little more expensive than she usually likes and they could make their expenses tighter. "It has a huge barrier to entry that Microsoft doesn't have," she said. "The power of this business model is great."

Adami agrees and says it has a great balance sheet, "more attractive than Amazon." Terranova seconds that and says all the search ad money is going to Google, but Najarian said everyone should stop discounting Microsoft, which is still holding over $30 and still the "big dog" in the room. Terranova thinks Google is a value stock.

Last-Minute Bargains

It's just three days until Christmas and Melissa began looking at last-minute bargains. She asked analyst Eric Beder at Brean Murray Carret & Co, which retail stocks have been most compelling for him and he responded with

Guess

(GES) - Get Report

and

J. Crew

(JCG)

-- two "great fashion names."

He also likes teen retailer

Aeropostale

(ARO)

, whose going strong even as teen unemployment is at 25%-plus and teen spending power is down 30%. For lower-price players, go to Aeropostale, he advises. He says that the retailer is a better stock to look at that Abercrombie. "The premium denim market is holding up really well," he said.

Najarian said he's a big fan of

Buckle

(BKE) - Get Report

.

Ones to Watch

Melissa said the

CBOE VIX

has dropped 50%. "Are we too complacent?" she asked.

Najarian said that with Thursday being a half day and Friday being a whole day off for the markets, it's probably fair value right now. Its true value will only emerge in January, he said. He still looks at every aspect of the VIX -- its front months, calls and puts.

On the topic of inflation, investor Peter Schiff, speaking from Stamford, CT said inflation isn't a mirage.

"You can still have inflation with weak economy which makes it worse," he said. " The Fed fights it off by creating inflation." In fact, he thinks that hyperinflation could hit eventually, though not necessarily in 2010. The remedy, he said, is to stop printing money before it becomes too late, and let the financial and housing systems correct.

Schiff goes on to say that he thinks there's lot of support for gold at about the $1,000 level or just below, "but you don't have to wait for that." He said there has been a big enough pullback for gold. It's been trading strong these days, which is a sign of a short-term bottom. "If you're a trader, you probably want to trade it on the long side," he said.

Lee pointed out that

DVY

(DVY) - Get Report

has outperformed market 2 to 1.

Najarian said to look at

XLU

(XLU) - Get Report

and

FPL

(FPL) - Get Report

, with its 4% to 5% dividend yield. "Look at food or pharma," he said, describing 52-week highs. "Their dividend yields are fantastic -- good growth, good balance sheets."

Karen: likes

SFL

(SFL) - Get Report

, its manager and its dividend yields. Adami thinks that Verizon has great dividends, while Terranova thinks

Exxon

(XOM) - Get Report

,

BP

(BP) - Get Report

and

Piedmont

(PNY)

make great exposures.

Lee says HMO stocks are another one to look at: "they've been going up," while Adami cautions don't wait now for the next couple of dollars. "Say 'nice trade' and move on."

Terranova said, "Get out of managed health care right now."

Najarian still likes

Watson Pharma

(WPI)

. "Those generics are very strong," he said.

American Greetings

(AM) - Get Report

was one of the most active names on

NYSE

today.

Jeremy Zirin of UBS said the market hasn't priced in a 2010 recovery -- even if tepid; treasuries are closer to 3.5%, while they're usually in the high-teen multiples. He's seeing corporate profits still recovering and now recovering nicely.

Zirin said the next quarters should look good due to cost cutting and expects to see a continued weakening of the dollar into 2010, but doesn't see the dollar collapsing: "It's not in anyone's interest, especially our trading partners'." He likes tech, energy and material. He favors them in the recovery phase partly because they are centered on global and not U.S. recovery. He's not bearish on commercial real estate, but says its scope for recovery is not as great as some of the others.

"Fast Money" focused on

3Com

(COMS)

and Google in the final trade.

-- Written by Andrea Tse in New York

To watch replays of Cramer's video segments, visit the Mad Money page onCNBC

.

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"'Fast Money'Portfolios of the Week" on Stockpickr every Thursday.

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