'Fast Money' Recap: Driving the News

NEW YORK (TheStreet) -- The S&P 500 finally started to pull back on Tuesday, closing lower by 0.50%. 

On CNBC's "Fast Money" TV show, the trading desk was talking about General Motors (GM), the subject of a new federal criminal investigation of GM's recall of1.6 million vehicles for defective ignition switches. 

Karen Finerman, president of Metropolitan Capital Advisors, said she is long GM and does not like this news. However, she said management should confront the issue and try to put it behind the company as soon as possible. 

Jon Najarian, co-founder of optionmonster.com and trademonster.com, pointed out the strong put option buying, signaling investors are nervous of further losses. He thinks shares could decline to the January lows near $30. 

Steve Grasso, director of institutional sales at Stuart Frankel, said investors could start to buy GM near current levels. He suggested using a stop-loss at $33. 

Brian Kelly, founder of Brian Kelly Capital, said investors who are already long GM should look for a pop up towards $37 and then sell out near those levels. 

Tesla Motors (TSLA) will not be allowed to make direct sales to customers in New Jersey, which will certainly hamper sales in the region. Ben Kallo, senior analyst at R.W. Baird and a guest on the show, said New Jersey is joining only a few states in the U.S. that currently restrict direct sales to customers. He still thinks  the stock is a buy on pullbacks since it will only affect a very small amount of sales. 

Kelly, who is long the stock, said he is remaining long. He added that if he were not already long the stock he would buy at current levels. Grasso suggested that many investors are buying the stock for Tesla's Gigafactory and will not worry about this news. 

Based on options activity, Najarian thinks Tesla may be headed to $225, where it could catch some support. 

Kelly said he covered his short position in copper. 

Grasso is not a buyer of Apple (AAPL) at current levels, but he is a buyer of Pandora (P). Najarian disagreed, saying Apple's "ecosystem" is a reason to own the stock. He is long.

Grasso said he will remain long VeriFone Systems (PAY) but said investors should not establish a new long position. 

Najarian pointed out that a large trader sold out of the March $55 calls in Restoration Hardware (RH) and bought 4,000 April $65 call options, implying there is more room left to the upside. 

Martin Plaehn, chairman and CEO of Control4  (CTRL), was a guest on the show. Control4 has a deal with Toll Brothers (TOL) where its devices will be hooked up in model homes so prospective home buyers can see and use the products. He said the company's compatibility with so many devices will make it easy for customers to use. He is fairly confident the products would be attractive to new customers, as smart home concepts continue to gain traction. 

Kelly said he "loved" the stock at current levels, pointing out there is support near $19. 

Michael Burns, vice chairman of Lions Gate Entertainment (LGF), said that in each of the past four weeks, over one million book copies of Divergent have sold. This is boosting management's confidence that the movie will do well when it launches next week. He added that the series doesn't need to be the next Hunger Games to be highly successful. He said the new film will likely do better domestically than internationally, as did the Hunger Games. 

DuPont (DD) fell 2% and was the first stock on the show's "Pops & Drops" segment. Brian Kelly said he would avoid the stock.

FuelCell Energy (FCEL) dropped 17%. Najarian pointed out the stock actually made a bigger move, falling 30% from Tuesday's high. 

Fannie Mae (FNMA) plunged 32% on proposed legislation that would cripple the company. Finerman acknowledged the stock's disastrous reaction but said the company is unlikely to be shut down. However, she did not say she was a buyer. 

T-Mobile U.S. (TMUS) climbed 1%. Grasso said the stock could go higher. 

Kelly suggested that Twitter (TWTR) may start to see some upside action because it has severely lagged Facebook (FB) in recent weeks. Grasso and Kelly are both long TWTR. 

Najarian said Zynga (ZNGA) could pop higher sometime this week, highlighted by the bullish buying of the weekly $6 calls. 

Finerman said she still likes the financial stocks, specifically Bank of America (BAC), J.P. Morgan Chase (JPM) and Citigroup (C). 

For their final trade, Finerman is a seller of Ulta Salon, Cosmetics & Fragrance (ULTA) and Kelly is a buyer of BlackBerry (BBRY). Najarian is a buyer of Restoration Hardware and Grasso is buying Google (GOOG). 

-- 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.

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