Top Takes From RealMoney

Here's what some of our market pros are saying and playing.

Author:: RealMoney Staff
Publish date:: May 4, 2009 3:07 PM EDT

Here's what some of our market pros are saying and playing.

The RealMoney contributors are in the business of trading and investing all day on the basis of ongoing news flow. Below, we offer the top five ideas that RealMoney contributors posted today and how they played those ideas.

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1. Barron's Commercial Real Estate Article

By Christopher Grey
1:04 a.m. EDT

The

Barron's

article this weekend on commercial real estate is right on the money in my opinion. It identifies the key bear concerns, which include falling cash flow and lingering balance sheet issues, and bull arguments, which include successful equity raises and flight to quality by investors to the largest and strongest REITs that will survive and grow through this downturn.

Overall, I think the

iShares Dow Jones Real Estate Index

ETF

(IYR) - Get Report

is stuck in a trading range as the bears and bulls battle it out for a while. I have been playing this successfully with short-term trades in

ProShares Ultra Real Estate

(URE) - Get Report

, buying on weakness in the low 3's and selling on strength in the high 3's. I prefer URE as a trading vehicle because of its price relative to its option value, which I believe is favorable. I think IYR and URE will have difficulty significantly breaking out of this range to the upside or downside unless there is major change in the macro environment.

No positions.

2. Restaurant Sector Weakening Rapidly

By Alan Farley
7:54 a.m. EDT

Restaurant stocks have been on fire in the last month, but it looks like the rally is coming to an end. A wave of selling pressure hit the group last week, after poorly received

Burger King

(BKC)

earnings.

McDonald's

(MCD) - Get Report

has also been rolling lower since it posted relatively strong first quarter earnings on April 22.

PF Chang's

(PFCB)

is my top choice if you're looking for a pullback play in the restaurant sector, once the group stabilizes from recent weakness. The stock broke out above eight-month resistance on April 22 and has now pulled back into the breakout gap. The fill level is right around $29. This should support the stock and trigger a bounce back to the high. My target for the continuing uptrend is in the upper $30s.

More technical comments on the stock and annotated chart

here

No positions

3. Monster Move in China

By Scott Rothbort
10:09 a.m. EDT

The Chinese markets, both Hong Kong and Shanghai, had huge moves overnight. China, it appears, is going to lead the world out of the global recession. That country did it with far less stimulus than the U.S. China got a better bang for the yuan, so to speak, as that country's stimulus was targeted with more precision than the U.S. spendulus or porkulus, whatever it was.

I have long held

China Life

(LFC) - Get Report

and

China Mobile

(CHL) - Get Report

and added the

FTSE/Xinhua China 25 Index

(FXI) - Get Report

ETF several weeks at various levels in the belief that China would be the first to emerge from the global economic doldrums.

Long stock: LFC, CHL, FXI

4. Look for Laggards If You Are Nervous

By Brian Gilmartin
1:42 p.m. EDT

The 903 level for the

S&P 500

was the Dec. 31, 2008, close (but I don't know if that is remotely critical from a technical perspective), and yet we just took out the 875-877, January '09-February '09 highs for the S&P 500, so I am nervous about buying here. Still, one way we are trying to be prudent about putting cash to work is to look for those stocks or sectors that are lagging.

Utilities are lagging (great call by Howard Simons), but we've added a smidge to accounts, given their 4%-5% weight within the S&P 500. Telecom, too, another 4%-5% weighting in the S&P 500, and I thought the earnings reports for both

AT&T

(T) - Get Report

and

Verizon

(VZ) - Get Report

were decent. Nothing negative of note was disclosed.

Some of the staples are lagging as well, such as

Johnson & Johnson

(JNJ) - Get Report

Procter & Gamble

(PG) - Get Report

and

Coca-Cola

(KO) - Get Report

. As long as the dollar doesn't strengthen dramatically and your time horizon is longer than the next two weeks, we've been sniffing around these names.

I thought Jim Cramer was pretty critical of PG's report and of the management last week. We covered the call, and the ability to pass through a 7% price increase was indicative of the power of that premium brand. I didn't like the volume decline of 5%, but the stock reacted very little to the bad news. We are not long PG currently, but that is another one I'm looking at, given how the stock has traded relative to the 5% organic volume decline. Like the utes, PG is still trading above its 50-day moving average.

long SPY, index funds, KO, T, VZ, JNJ, XLU

5. The Coal Thesis Took a While To Work...But It's Working

By Dan Fitzpatrick
2:02 p.m. EDT

Jim, remember that

video on coal

we did back in February when I was at your offices? The thesis has taken a while to work through the market, but it does seem to be working.

In that video, you mentioned that

Massey Energy

(MEE)

would make sense if we start shipping coal overseas, and that's what's happening now.

Long PCX

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