'Fast Money' Recap: Waiting for Twitter

NEW YORK (TheStreet) -- Technology lagged as the Dow Jones Industrial Average led the broader markets higher. All eyes are fixated on the Twitter IPO scheduled for Thursday. 

On CNBC's "Fast Money" TV show, Steve Grasso of Stuart Frankel & Co. said it makes sense that financial advisers have been telling clients to avoid the stock because of the debacle with Facebook (FB) after it went public. 

Mike Khouw, managing director and primary strategist at DASH Financial, said Twitter is not floating a lot of stock ; looking at its valuation, it would be foolish to chase it on the opening day. 

Jon Najarian, co-founder of optionsmonster.com and trademonster.com, added that it won't be the "pros" chasing shares of Twitter but the retail traders. 

Dan Nathan, co-founder and editor of riskreversal.com, said the demand for the stock is huge while the supply is very small. The real buying opportunity might be in six months when more shares come to the public market.

Najarian said there is no "ATM effect" from Twitter, where investors are selling other stocks -- like Facebook or LinkedIn (LNKD) -- to raise cash for shares of Twitter. He added the deal is just too small at 70 million to 80 million shares to have any kind of noticeable affect. 

Nathan added that momentum names, like Tesla Motors (TSLA), have been selling off mostly due to fundamentals. He said if the $140 level holds it might bounce back to $170, but for right now the hype is gone. 

Grasso said he wants to buy TSLA and suggested investors watch Wednesday's low of $146.35. If that level breaks, the stock will continue lower. 

Channing Smith, portfolio manager at Capital Advisors Growth Fund, was a guest on the show and said his fund would not be buying Twitter, mostly due to valuation concerns. He added that it's one of the most expensive IPOs he's seen based on its price-to-sales ratio.

Whole Foods Market (WFM) fell after reporting earnings and Najarian said the stock was expensive on a valuation basis while The Fresh Market (TFM) and Sprouts Farmers Market (SFM) were eating into WFM's pricing power. 

Qualcomm (QCOM) beat on the top line but missed on the bottom. Nathan said that he would be a buyer at $65.50, near the 200-day moving average, ahead of its analyst meeting on Nov. 20. 

Grasso said he sold Google (GOOG) because the stock appears to have lost its momentum. Karen Finerman, president of Metropolitan Capital Advisors, admitted that she didn't want to trade around the stock so she is holding it for the long term. 

Microsoft (MSFT) continues to move higher and Najarian said the options volume remains strong and favors the upside. 

Nathan said Ford (F) CEO Alan Mulally -- who many want to be the next CEO of Microsoft-- would be a bad candidate to turn the tech company around. He added that if that happens, traders could attempt to short Microsoft and buy Ford. 

Khouw said it seems unlikely anyone could turn around Microsoft because its main market in PCs continues to lose ground to mobile. 

Grasso added the CEO announcement will cause a pop, but will be a sell-the-news type of event.

Finerman attributed most of the recent gains in Microsoft to speculation over the next CEO rather than on the company's fundamentals.

Najarian said Activision Blizzard (ATVI) should have a strong holiday quarter, despite the company's lower-than-expected guidance. 

Polo Ralph Lauren (RL) was the first stock on the show's "Pops & Drops" segment. Nathan said he would not chase the stock. 

Chesapeake Energy (CHK) dropped 7% and Grasso said he would not be a buyer, especially after the stock closed below its 50-day moving average. 

Live Nation Entertainment (LYV) also fell 7%. Finerman said she would buy shares if the selloff continues on Thursday because she likes the long-term story. 

Humana (HUM) jumped 2% and Najarian said the stock seems likely to break through $100 within the next week. 

Zillow (Z) declined 4%. Khouw said the bearish reversal was concerning and demonstrated weakness in the stock price. 

Sam Hamadeh, founder and CEO of PrivCo, was a guest on the show. He said if the stock is priced at $27, it's a good valuation and should cause shares to pop higher on the first day of trading. He added the company has two lockup dates: Feb. 15 and May 15. He suggested investors should use the latter date to buy shares if they still want exposure. 

For their final trades, Najarian is buying Petrobras (PBR) and Khouw said to go long Freeport-McMoRan (FCX) via short out-the-money January put options. Grasso is a buyer of Potash (POT), Nathan is buying Corning (GLW), and Finerman is long the SPDR S&P 500 Trust ETF (SPY) and short the iShares Russell 2000 ETF (IWM) in a pairs trade.

-- Written by Bret Kenwell in Petoskey, Mich.

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Bret Kenwell currently writes, blogs and also contributes to Robert Weinstein's Weekly Options Newsletter. Focuses on short-to-intermediate-term trading opportunities that can be exposed via options. He prefers to use debit trades on momentum setups and credit trades on support/resistance setups. He also focuses on building long-term wealth by searching for consistent, quality dividend paying companies and long-term growth companies. He considers himself the surfer, not the wave, in relation to the market and himself. He has no allegiance to either the bull side or the bear side.

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