'Fast Money' Recap: Momentum Shift

NEW YORK (TheStreet) -- While the S&P 500 only closed lower by 0.11% and the Dow Jones Industrial Average finished flat on Thursday, many momentum stocks sold off hard. 

On CNBC's "Fast Money" TV show, Guy Adami, managing director of stockmonster.com, said he was disappointed by what only ended up being a short-term bounce in momentum stocks. He said Tesla Motors (TSLA) still looks the best of the momentum stocks group. 

Dan Nathan, co-founder and editor of riskreversal.com, suggested traders who feel stuck in momentum stocks should not be afraid to cut their losses and move on. 

Brian Kelly, founder of Brian Kelly Capital, said he sold his long position in Tesla and added to his long position in FireEye (FEYE). He was a seller of FEYE on a bounce higher. 

Karen Finerman, president of Metropolitan Capital Advisors, used Thursday's selloff to buy Pandora (P). 

Nathan said shares of Pandora could suffer if the company raises its prices and customers respond negatively. He added the stock looks vulnerable. 

Twitter (TWTR) was the featured stock on the show's "Street Fight" segment. Kelly was the bull, arguing that sentiment for the stock is way too pessimistic. He added that Twitter is trading just as Facebook (FB) did shortly after its initial public offering before going on a long run to the upside. 

Nathan disagreed and bearishly argued the stock is still higher than its IPO price, meaning it has more room to decline. The company initially went public with 80 million shares but 474 million more shares will soon become eligible for insiders to sell, which will weigh on the stock price. He concluded the company has very little growth for being such a young company. 

Twitter's price action has not been good, and the stock could decline to $40, Adami said. Finerman was not a buyer of Twitter. 

Richard "Dick" Bove, vice president of equity research at Rafferty Capital, was a guest on the show. Citigroup (C) will pay a $400 million fraud charge for its operations in Mexico. Bove said this is only "the tip of the iceberg." He added that Citigroup was the only major bank to experience loan loss increases in the fourth quarter, while revenue declined for the third consecutive quarter.

He concluded that management is not doing its job to run such a complex institution and questioned why investors would rather own Citigroup instead of Bank of America (BAC) or Wells Fargo (WFC).  

Kelly said he didn't like the financial sector because the economy needs to improve and the stocks have run so much. If the economy is going to improve, he would rather be long U.S. Steel (X) or AK Steel (AKS).

Finerman is long Citigroup based on valuation. She is also long BAC. 

Nathan was a seller of the Financial Select Sector SPDR ETF (XLF) via out-the-money put options. 

Adami said investors should be concerned if Citigroup breaks below $46, but so far that level continues to hold. 

Finerman sold her long position in General Motors (GM). She admitted to liking CEO Mary Barra but said the stock will take too long to rally. 

Nathan was not a buyer of Yelp (YELP) at current levels but suggested investors could buy the stock at $65, near the 200-day moving average. 

CNBC's John Jannarone was a guest on the show. Despite Liberty Media (LMCA) selling 90% of its 17.5% stake in Barnes & Nobles (BKS), he said the business still seems okay. Although Barnes & Noble's presence in e-books hasn't worked out very well, he noted e-book sales are plateauing. In other words, physical books should keep BKS afloat for the foreseeable future. He called the stock a good value at current levels. 

Adami said investors could buy Boeing (BA) as long as it continues to stay above $120. 

Shane Smith, co-founder and CEO of Vice, said his magazine company will continue to bring its content to as many platforms as possible including TV, online and mobile. The company also licenses its content in many different countries. Although it was valued at $1.4 billion in 2012, he said the company has grown revenue and margins substantially since then. He concluded that VICE is debating an IPO, but has no immediate plans to do so. 

Finerman said she would try to get issued shares of GrubHub (GRUB) on its IPO but admitted that it would be unlikely. She added that GRUB has a great business.

Nathan was long Costco Wholesale (COST) via April call options. He was optimistic ahead of the company's March sales results. 

Irwin Simon, founder, president and CEO of Hain Celestial Group (HAIN), said higher food prices are inevitable, but from a percentage standpoint consumers shouldn't worry too much. He added he is very happy with the company's recent acquisition of Tilda, a rice company. He concluded that healthy eating and living is not just a fad. 

Finerman said she loves both Hain Celestial Group and its CEO, but admitted the stock was rather expensive at current levels. 

Nathan pointed out the bullish options trade he saw in SodaStream (SODA): A trader sold 4,000 October $35 put options and used the proceeds to buy 4,500 October $52.50 call options. The breakeven point is near $35.  

For their final trades, Nathan was a seller of the Guggenheim Solar ETF (TAN) and Kelly was a buyer of Consol Energy (CNX). Adami said to buy General Motors and Finerman as a buyer of Bank of America.

-- 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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