'Fast Money' Recap: Following the Netflix Story

NEW YORK (TheStreet) -- The S&P 500 closed near session highs, up 0.38%. 

Netflix (NFLX) jumped higher in the after-hours trading session on an earnings beat and on news that it would be raising prices. 

On CNBC's "Fast Money" TV show, Dan Nathan, co-founder and editor of riskreversal.com, said shares of Netflix need to find support near current levels or they could be headed lower. 

Guy Adami, managing director of stockmonster.com, pointed out Netflix's international growth is doing "extraordinary well." He said the stock seems poised to go higher. 

Steve Grasso, director of institutional sales at Stuart Frankel, said the "story" for Netflix is still intact. If forced to chose to either buy or sell the stock, he was a buyer. 

Brian Kelly, founder of Brian Kelly Capital, admitted Netflix might be headed higher, but he is not a buyer. He questioned the company's business model and said content costs will not be covered by the price hike for its customers. 

Tony Wible, managing director at Janney Capital Markets, said the price hike from Netflix will not force customers to drop the service. In fact, he suggested it would force customers to stay signed up in order to lock in the lower rates. He said the decision to raise prices will unlock value for shareholders. 

Michael Pachter, managing director of equity research at Wedbush Securities, was a guest on the show. He has a sell rating on shares of Netflix with a $175 price target. He admitted that the company had a good product and can enhance its customers' experience with faster connection speeds and better content. However, with rising costs and an extreme valuation, he questioned how the stock could remain at current levels. 

Valeant Pharmaceuticals (VRX) is teaming up with Bill Ackman, fund manager of Pershing Square, to make a hostile bid for Allergan (AGN). Nathan questioned why shares of AGN are up so much in the past six months, given that the company's growth is good but not great. 

Adami said there are very few companies that can pull off a $50 billion M&A deal, suggesting that another company may come into play. He said to take profits on the move higher for AGN and VRX shareholders. Kelly agreed.

Grasso said the iShares Nasdaq Biotechnology ETF (IBB) may have made a bottom and suggested investors could get long if the stock maintains support over the next few trading sessions. 

Mike Weinstein, senior medical technology analyst at JPMorgan, said specialty pharmaceutical stocks have been, and will continue to be, attractive acquisition targets. He suggested that more bids like the one by Valeant Pharmaceuticals will be on the way. His top picks in health care are Covidien (COV), Spectranetics (SPNC) and St. Jude Medical (STJ). 

Kelly pointed out the insider buying in SPNC and said the stock looks like a buy based on its recent price action. 

Nathan called the Google (GOOG) trade "crowded." The stock continues to selloff after the company reported what he considered a pretty decent earnings report. 

Adami said he's surprised of the selloff in Google, saying, "I don't think the stock is expensive at all." 

Grasso said the news of Ford's (F) CEO Alan Mulally possibly stepping down as soon as May 1 is not news to the market because investors have expected it for quite some time. He was cautious on the stock over the short term. 

Kelly added that Ford's business doesn't change with Mulally's move because the company is still doing well in a good auto sales environment. 

Nathan suggested that shares of Ford could retest its 52-week highs, as seen by bullish options activity. 

Dennis Gartman, editor and publisher of The Gartman Letter, was a guest on the show. Regarding the potential merger between Newmont Mining (NEM) and Barrick Gold (ABX), he said it was only a matter of time before the deal happened. He added that he was a buyer of gold in yuan currency at current levels. He was also a buyer of U.S. stocks. Specifically, he likes aluminum and coal stocks at current levels. 

Kelly was still cautious of the overall stock market. 

Before buying, Grasso said investors should wait for new highs in the S&P 500 or to see if the index finds support at the 1,835 level. 

Nathan still said a bigger pullback seems to be looming in the equities market. 

After jumping 6% on Monday, Micron (MU) was the first company on the show's "Pops & Drops" segment. Adami said the stock seems poised to go higher. 

Sketchers USA (SKX) jumped 2%. Kelly was not interested in buying the stock. 

TransCanada (TRP) fell 4%. Grasso was not a buyer at current levels. 

Nathan said it seems like shares of Yum! Brands (YUM) wants to break out and go higher. He cited some bullish options activity ahead of its earnings report on Tuesday. 

Adami was a buyer of Yum! Brands over McDonald's (MCD), which also reports earnings on Tuesday. 

Kelly said Disney (DIS) needs to find support at $77; otherwise, it is likely headed lower. 

Grasso "would wait" to buy casino stocks at current levels, saying they needed to find support. 

Nathan pointed out how well shares of Zillow (Z) are trading, considering how high its valuation is and how poorly other momentum stocks have been doing over the past month. The stock made new 52-week highs in Monday's session. 

For their final trades, Kelly was a buyer of the iShares 20+ Year Treasury Bond ETF (TLT) and Nathan was a seller of International Business Machine (IBM). Grasso was a buyer of Tesla Motors (TSLA) and Adami likes Facebook (FB) on the long side. 

-- 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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