'Fast Money' Recap: Watch Where Bonds Are Headed

NEW YORK (TheStreet) -- The S&P 500 eked out a 0.14% gain on Friday, extending its winning streak to four consecutive sessions. 

On CNBC's "Fast Money" TV show, Guy Adami, managing director of stockmonster.com, pointed out the big reversal in the iShares 20+ Year Treasury Bond ETF (TLT) on Thursday, signaling bond yields may be headed higher. He added that next week's action in the stock market could be pivotal in deciding its next big move. 

Brian Kelly, founder of Brian Kelly Capital, said the directional market action is first noticeable in bonds via the TLT, then in the CurrencyShares Japanese Yen Trust ETF (FXY) before finally showing up in the SPDR S&P 500 Trust ETF (SPY). He questioned the sustainability of the current rally in equities. 

Tim Seymour, managing partner of Triogem Asset Management, said financial and industrial stocks continue to do well. He said this week's U.S. economic data were good while China's economic data were decent. 

Dan Nathan, co-founder and editor of riskreversal.com, pointed out Chipotle Mexican Grill's (CMG) 11% intraday reversal to the downside. He added the stock is still very expensive and has rising input costs. 

Kelly suggested McDonald's (MCD) will likely have its margins squeezed as well due to rising input costs. 

Seymour said investors should wait for International Business Machine's (IBM) investor day to see if there are positive catalysts to help improve the business. 

Carter Braxton Worth, chief market technician at Sterne Agee, said the market has further downside ahead. Specifically, he said the PowerShares QQQ Trust ETF (QQQ) and the iShares Nasdaq Biotechnology ETF (IBB) -- which have fallen 9% and 25% from the highs, respectively -- could have more downside. He added that the Energy Select Sector SPDR ETF (XLE) looks to have 10% more upside. 

Kelly said he likes energy stocks, specifically natural gas stocks, at current levels. He was a buyer of Chesapeake Energy (CHK).

Seymour said Tesoro (TSO) and Southwestern Energy (SWN) seem poised to go higher.

Adami said General Electric (GE) should have a higher valuation as it moves toward higher-margin businesses. Seymour was optimistic on the company's long-term core business. 

Kelly was no longer long Advanced Micro Devices (AMD) but he is looking for a long entry after the company's positive earnings beat. 

Jeff Papp, senior analyst at Oberweis, was not a buyer of Weibo (WB), which closed higher by 19% in its first day of trading, or JD.com, the second largest e-commerce company in China that is looking to go public. Regarding JD.com, he said the company will be focused on growing revenue and not profits, and is making a mistake by publicly debuting ahead of Alibaba. 

He reasoned that Weibo is also focused on growing revenue and its user base instead of profits. However, he said Alibaba may take over Weibo since it already owns a 31% stake in the company. He was a buyer of Alibaba, due to its strong growth, reasonable valuation and strong operating margins. 

Seymour said Weibo faces a lot of competition. Instead he was a buyer of Sina (SINA). 

Nathan bought Renren (RENN) as a way to play the potential over-optimism of Chinese Internet IPOs. He is keeping a "tight" stop-loss on the position, though. 

Ben Kallo, senior analyst at RW Baird, downgraded shares of SolarCity (SCTY) in February and the stock has fallen 35% since. On Thursday, he upgraded the stock to a buy with a $75 price target. 

He argued the stock's valuation is more reasonable and the company could benefit from strong household solar adoption. He added that the household rooftop market may grow 50% year over year. His top long-term pick is SunPower (SPWR). Regarding Tesla Motors (TSLA), he was cautious heading into earnings, but optimistic for the second half of 2014. 

Kelly said investors should wait until after earnings to buy Tesla. He pointed out there is support near $185. Adami liked SolarCity at current levels, following the big selloff.  

Netflix (NFLX) was the featured company on the show's "Street Fight" segment. Nathan defended the stock, saying Netflix has fallen 25% from its all-time highs and is oversold. He pointed out that earnings expectations are very low and the stock has a high short-interest, which could drive shares significantly higher if results are better than expected. 

Seymour disagreed, bearishly arguing Netflix faces usage-based pricing headwinds as well as rising content costs. He added that competition in streaming video and original content is increasing while second-quarter guidance may be weaker than investors are anticipating.

Both Adami and Kelly believed that Netflix was headed higher following its earnings report.

Barnes & Noble (BKS) fell 12%, making it the first stock on the show's "Pops & Drops" segment. Adami was not a buyer at current levels.

Schlumberger (SLB) dropped 1%. Seymour said to stay long but not to buy at current levels.

GoGo (GOGO) jumped 6%. Nathan said the stock is overbought and investors can buy near current levels.

SanDisk (SNDK) popped 9%. Kelly suggested that investors buy the stock, but only after a pullback

Nathan said Occidental Petroleum (OXY) seems poised to break out to the upside. He cited bullish options activity as well.

In honor of CNBC's 25th anniversary, the traders gave their top picks for the next 25 years. Seymour was a buyer of General Electric and Nathan said to buy Amazon (AMZN). Adami was a buyer of Honeywell International (HON) and Kelly said to buy Bitcoin. 


-- 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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