'Fast Money' Recap: Getting to the Core of Apple

NEW YORK (TheStreet) -- The S&P 500 closed lower in a volatile trading session. Monday began a busy week of earnings. Apple (AAPL) reported after the close. 

The technology giant beat on top- and bottom-line estimates but provided a below-consensus, second-quarter guidance to go along with lower-than-expected sales of the iPhone. 

Guy Adami, managing director of stockmonster.com, said it seems like the stock will set up as a good long on Tuesday. He added Tuesday's low is unlikely to surpass Monday's after-hours low. 

Karen Finerman, president of Metropolitan Capital Advisors, said gross margins look pretty good, but Apple needs a new product category as a positive catalyst for the stock. She added that it's a hard stock to value but below $500 it is attractive. 

Tim Seymour, managing partner of Triogem Asset Management, said many investors want the positive catalyst to be China, but earnings per share growth won't be that big due to the region. Below $515, AAPL could have some trouble. 

Josh Brown, CEO and co-founder of Ritholtz Wealth Management, said the stock could get crushed, just as it did around the same time last year. He argued Apple stock is cheap and that shouldn't happen. He questioned why a company like Hewlett-Packard (HPQ) trades with a higher valuation. 

Colin Gillis, senior tech analyst at BGC Financial, was a guest on the show. He downgraded AAPL in Monday's trading session, based on valuation and his price target. He said the company desperately needs a new product to get investors excited again. 

Gillis added that iPhone demand is still good, but softer than what analysts had expected. He also said that iPhone activations on the China Mobile Limited (CHL) network are strong, but it could be the end of the "miraculous iPhone run" of upside estimate beats. 

Brown noted Apple is still selling a ton of iPhones, 51 million in the most recent quarter, and should perhaps consider doing some financial engineering, as hedge fund manager Carl Icahn proposed. 

Seymour said investors should be careful trying to mimic activist investors like Icahn.  He added that luxury spending in China has been strong and should be a good market for Apple. Brown concurred.

Dennis Gartman, editor and publisher of The Gartman Letter, said the problems in emerging markets weren't all that concerning until issues in China arose. He is a buyer of gold and a seller of industrial metals such as copper and palladium. He said he was wrong about palladium when he said to buy it a few weeks ago. He suggested investors lighten their exposure to equities and sell emerging-market currencies.

Adami said the S&P 500 needs to hold the December lows around 1,765. As of now, it seems unlikely to break below that mark. 

Seymour urged investors to reconsider shorting many emerging market countries because they've already declined significantly. 

Brown said 1,750 in the S&P 500 seems like "logical support." However, he thinks the Federal Reserve meeting later this week could be a game changer. 

Finerman said her strategy is to buy stocks that she likes at realistic prices while trying to block out a lot of other "noise." Overall, she is a net-buyer on Monday. 

Adami said investors could go long Nuance Communications (NUAN). 

Seymour advised investors not to chase Qualcomm (QCOM) at these levels. 

Finerman said she covered her short in Caterpillar (CAT) because the position was not working out. The company reported better-than-expected earnings results, but showed significant weakness in mining equipment. 

Adami said that at current levels, CAT looks like an attractive short-sell candidate since it is near the upper end of its range. Brown added that any sort of bad macro economic data could send the stock significantly lower. 

Vodafone (VOD) was the first stock on the show's "Pops & Drops" segment. Seymour suggested not chasing the stock after it fell 3%. 

Merck & Co. (MRK) was up 1% on a Morgan Stanley upgrade. However, Brown found it too expensive and he's not a buyer. 

Lululemon Athletica (LULU) dropped 3% and Finerman said it's almost down to a buyable price. 

Xerox (XRX) fell 5% and Adami said investors could buy the stock at $9. 

Larry McDonald, senior director at NewEdge, was a guest on the show. He said investors should be focused on the shadow banking issues in China, but admitted it would likely take awhile to a hurt a strong bull market like the current one in U.S. equities. He suggested investors focus on the credit default swaps from financial institutions as tells on what may happen next. 

Brown said investors should not get caught up in all of these new but very odd exchange-traded funds such as the LocalShares Nashville Area ETF (NASH) and the Forensic Accounting ETF (FLAG). He referred to them as "snake oil" sales. 

For their final trades, Finerman is a buyer of United Rentals (URI) and Seymour is selling  United Technologies (UTX). Brown said to buy Corning (GLW) and Adami is buying Barrick Gold (ABX). 

-- 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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