'Fast Money' Recap: Finerman's 3 Picks for 2011

NEW YORK ( TheStreet) -- The markets closed mixed as commodity stocks continue to advance.

The Dow Jones Industrial Average rose 18.24, or 0.16%, to 11, 428.56 while the S&P 500 added 0.06, or 0.00%, to 1,240.460. The Nasdaq was down 12.63, or 0.48%, to 2,624.91.

Joe Terranova said on CNBC's "Fast Money" TV show that the real question Tuesday in the commodity space is whether the commodities can hold onto today's gains. He doesn't believe that will happen and that is why he is shorting gold.

Brian Kelly took the opposite view. He's long the metal after what happened in China over the weekend, with the rise in inflation and the reluctance of the central bank to appreciate the yuan.

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 on TV

Melissa Lee, the moderator of the show, said China is encouraging investors to buy gold rabbit coins. Terranova, though, believed the gold trade is topping out. Guy Adami said one commodity trade that has been working is Walter Energy ( WLT), which he said is still fairly valued.

Stephen Weiss said he remains bullish in China and is buying commodities on dips. David Reidel, of Reidel Research, stuck to his call on Friday, when he said he would short the iShares FTSE/Xinhua China Index ( FXI) and buy gold and Hong Kong properties.

Commenting on a Virgina court decision challenging a key part of the administration health reform law, Adami said he liked Cerner ( CERN), a company that converts medical records into a digital format.

Karen Finerman provided her three top picks for next year. She liked the prospects for liquid natural gas, with rising daily rates and a lack of tankers to handle shipments. Her play: Golar ( GLNG).

For the second pick, she delved into the auto-trucks trade. She likes the space because a lot of capacity has been taken out of the market and newly capitalized players and companies emerging from bankruptcy are coming into play. Her play here is Dana Holding ( DAN).

Third, she believes M&A activity will pick up steam and is going with Blackstone ( BX) and Goldman Sachs ( GS)

Shifting to the commodities market, Terranova said natural gas has a long way to go before it gets to $6. He said there is simply a lot of supply that needs to be worked off.

Weiss took the other view. He believes natural gas will get a lift from crude and coal and thinks natural gas will benefit from the administration's energy policy.

Lee noted that Corning ( GLW) moved higher today. Finerman said it is benefiting from the glass used in LCD TVs and is awaiting news of LCD TV sales in Best Buy's ( BBY) report Tuesday.

In another in a series of forecasts for 2011, Doug Kass, of Seabreeze Partners Management, predicted that Washington gridlock will hurt economy and that a collision of monetary easing and fiscal imbalances in the U.S. and Europe will lead to a sideways market, in which the S&P will wind up at the end of 2011, pretty much where it ends up in 2010.

Weiss went to the charts to talk about the increased Internet usage among consumers along the super information highway. He picked three stocks that will ease the traffic jam: Finisar ( FNSR), which makes optical components to expand bandwith; Oclaro ( OCLR), and Infinera ( INFN), maker of the next generation of technology to handle traffic through the Internet.

Lee brought in Anthony Coles, president and CEO of Onyx Pharmaceuticals ( ONXX), which is seeking accelerated FDA approval of its experimental drug for Myeloma in mid-2011. He said Carfilzomib has the potential to be a $2 billion drug.

He also said the company is in Phase 3 of a liver-kidney drug for other uses, including lung cancer, thyroid cancer and other forms of liver cancer.

Lee referred to a chart showing the best performing China stocks listed in U.S. They included Spectrum ( SPRD), up 204%; 51Job ( JOBS), up 187%; Baidu ( BIDU), up 163%; China Southern Airlines ( ZNH), up 90%; and 7 days group holdings ( SVN), up 90%. Adami sounded a note on 7 Days, saying it was down today and advised viewers to check out the company's valuation and chart.

Shifting to the rare earth metals trade, CNBC reporter Brian Shactman said from Molycorp's ( MCP) Mountain Pass mine in California that the fears of a bubble in the trade are overblown. He said it doesn't look as if China will increase export of these metals soon and that the number of rare earth mines outside of China is limited to Molycorp's mine in the U.S. and one in Australia.

In the final trades, Kelly liked Hewlett-Packard ( HPQ). Adami liked Sprint ( S), while Finerman liked Corning. Terranova said he would get into natural gas by going with Southwestern Energy ( SWN) and buying puts in United States Natural Gas ( UNG).

--Written by David Tong in San Francisco.

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