'Fast Money' Recap: Managing Market Highs

NEW YORK (TheStreet) -- The S&P 500 extended its winning streak to three straight sessions, finishing higher on Wednesday by 0.3%. 

On CNBC's "Fast Money" TV show, Brian Kelly, founder of Brian Kelly Capital, said Twitter (TWTR) needs to figure out a plan to accelerate growth. He is long the stock and is looking to sell on a pop higher. 

Dan Nathan, co-founder and editor of riskreversal.com, is short Twitter via a bearish options position. He admitted that the stock didn't trade too poorly on Wednesday and will eventually figure out a way to succeed. 

Guy Adami, managing director of stockmonster.com, said Wednesday's price action in shares of Twitter weren't that bad. However, he said there is likely more pain ahead for shareholders. 

Karen Finerman, president of Metropolitan Capital Advisors, is not a buyer of Twitter. She added that just because the stock declines, doesn't mean it's cheap, valuation-wise. 

Adami added that Twitter's poor earnings results highlight how good Facebook's (FB) recent earnings report truly was. 

Neil Doshi, managing director of CRT Capital Group, was a guest on the show. He said Yelp (YELP) saw a 60% growth in its local business users, while unique users grew 74% and mobile growth grew 53%. He added that Yelp could be an M&A target by Yahoo! (YHOO), as its underlying fundamentals continue to be very strong. 

Because of the huge sell-off over the past few weeks, Adami said investors could buy Yelp and use Wednesday's low as a stop-loss. 

Nathan was a seller of Yelp near $68. 


Finerman remained pessimistic on Weight Watchers International (WTW), because it takes a long time to turn around its business, she said. 

Nathan suggested that investors should not "press" high valuation stocks on the short side, because they have sold off so much. He pointed out that shares of Salesforce.com (CRM) are starting to breakdown, but he was not a seller at current levels. 

Adami warned that CRM could pop higher, due to its high short interest. 

Apple (AAPL) raised $12 billion in the bond market, with its 10-year bonds paying a yield a 3.45%. This is only slightly higher than the 2.66% yield on 10-year U.S. Treasury yields. John Brynjolfsson, chief investment officer at Armored Wolf, was a guest on the show. He liked shares of Apple, due to its valuation, but did not care for the bonds over U.S. Treasuries, partly due to the illiquidity. 

The traders were asked if they would rather own shares of Apple, Apple bonds, or U.S. Treasuries:

Nathan and Kelly preferred U.S. Treasuries, while Adami liked Apple bonds and Finerman liked Apple stock. 

Adami said shares of Yahoo! are too cheap, given the valuation of the company and its 24% stake in Alibaba. He said shares should be above $40. 

Kelly said he did not find it comforting that Alibaba has yet to file for its IPO, like many U.S. investors had expected at this point. 

U.S. Steel (X) was the first stock on the show's "Pops & Drops" segment. Adami said to stay long the stock. 

WellPoint (WLP) jumped 6%. Finerman said she is staying long the stock. 

3D Systems (DDD) also popped 6%. Kelly said investors could buy the stock at current levels, but warned of the volatility. 

Under Armour (UA) climbed 4%. Nathan said he is long the stock, but would not be surprised to see it trading in the low $40s in the near future. 

Patrick Smith, founder and CEO of Taser International (TASR), was a guest on the show. He said the company is in the midst of an upgrade cycle. He added that a bulk of its growth potential lies in the international market. He argued that tasers are much safer in the field than many people initially thought. 

Adami said the stock is very volatile, but "worth a shot" on the long side. 

Regis Philbin was a guest on the show. He plans on selling his position in Apple this week, and is disappointed in Yahoo's price action. He is a buyer of Amazon (AMZN) at current levels, saying it could reach $400 by year's end. 

Adami called JDS Uniphase (JDSU) a "no touch" at current levels. 

Nathan pointed out the bullish options activity in shares of SunEdison (SUNE), where 50,000 July $20 call options were bought for $1.74. The break-even on the stock is at $21.74. 

For their final trades, Adami was a buyer of Facebook and Nathan was a seller of Starbucks (SBUX). Kelly was a buyer of the iShares 20+ Year Treasury Bond ETF (TLT) and Finerman was a seller Burlington Stores (BURL).


-- 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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