'Fast Money' Recap: Reacting to Today's Headlines

NEW YORK (TheStreet) -- The Dow Jones Industrial Average posted its first loss in five sessions and fell by triple digits for the first time in three weeks. 

On CNBC's "Fast Money" TV show, Steve Grasso, director of institutional sales at Stuart Frankel, said investors are running out of headlines to trade from, meaning any little thing -- good or bad -- can push the market either up or down. 

Dan Nathan, co-founder and editor of riskreversal.com, said Wednesday's action is not telling of anything to come in the near future. He added that issues in Iraq could have severe consequences going forward if they get worse, especially in the oil market. 

Brian Kelly, founder of Brian Kelly Capital, said Wednesday's small selloff does not need to have a reason behind the cause. He said it's "too early to say" whether the market will continue lower. 

Guy Adami, managing director of stockmonster.com, pointed out a few possible signs that a market pullback may be in the cards: The Russell 2000appears to be hitting a short-term top, the price action in Treasuries was volatile and odd and the Dow Transports traded poorly as well.

Nathan said he is not a buyer of Apple (AAPL) at current levels. He added the stock makes up 13.5% of the Nasdaq 100, meaning a pullback in Apple could hinder the index in future. He also pointed out that some of last week's big call buyers in Apple appear to be taking some profits. The stock is overbought according to the Relative Strength Index (RSI) and is getting near its previous 2012 high, which could act as resistance, he said. 

Adami said Netflix (NFLX) could be forming a double top and suggested that Apple may be, too, unless it can find support near $100. Grasso said he recently bought a "50% position" in Apple. He plans to buy the other 50% on a pullback to $85 or on a breakout higher. 

Shares of Synaptics (SYNA) jumped nearly 30% after the company announced it would purchase Renesas' LCD Driver unit for $475 million. Renesas is a supplier to Apple. 

Rick Bergman, president and CEO of Synaptics, said the acquisition will allow for thinner, clearer, and lighter smartphones. It will also allow for cost savings for both the phone manufacturer and Synaptics. He's hopeful the deal will also lead to a deal with Apple. He said the recent guidance boost does not include a potential deal with Apple. 

Grasso said investors seem to love the deal, but he found it interesting that Apple didn't want to buy Renesas when it had the chance. Perhaps Apple is building similar technology in-house and will not need Renesas in the future, he reasoned. 

Adami said it's hard to buy a stock when it's up 30% but he suggested investors could do just that because SYNA is not expensive in valuation. 

Nathan disagreed with Adami, warning investors not to chase the stock higher. 

Lufthansa, a German airline company, issued a profit warning on Wednesday and, as a result, much of the industry sold off. Adami said these sorts of selloffs, especially in Delta Air Lines (DAL), usually end up being a buying opportunity. The industry is "still fine," he said. 

Reports are circulating that Cisco Systems' (CSCO) CEO John Chambers may announce his retirement in September. Nathan is a buyer near $24, but told investors that it is unlikely to get the type of pop that Microsoft (MSFT) did when then-CEO Steve Ballmer announced his resignation. 

Adami found shares of Cisco attractively priced and reasoned the stock will head higher now that it has "its mojo back." 

Kelly agreed with Nathan, saying Cisco doesn't need to be "fixed" and shouldn't get a pop like Microsoft did. 

Micron (MU) was upgraded by Bank of America to buy from sell and was given a price target of $40. Grasso added that DRAM demand has remained strong, which benefits the company. 

Adami said it's hard to "chase" Micron at current levels but it seems likely to trade up toward $35. 

Restoration Hardware (RH) beat on top- and bottom-line estimates. Adami also pointed out that the company almost doubled analysts' estimates for operating margins. However, he reasoned the stock is at "nosebleed levels" and therefore is a buy on a pullback to $75, if it finds support near that level.

Kelly said the high-end of housing seems to be doing good, such as RH, whereas companies like Home Depot (HD) may have "run their course" for the time being. 

Nathan pointed out some bearish options activity in the SPDR Homebuilders ETF (XHB), specifically in the December $26 put options. Despite the exchange-traded fund's name it is comprised of many retailers, again such as RH, he said. 

Grasso is a buyer of 3D Systems (DDD) near $47.75, based on comments from president and CEO Avi Reichental on Tuesday's episode of Fast Money. He added the stock needs to hold that level for several sessions before he takes a long position. 

Nathan argued that shares of DDD have had terrible price action over the past five months and that investors shouldn't buy the stock until it's in the low $40s. 

Jack Lief, co-founder, president and CEO of Arena Pharmaceuticals (ARNA), said the prescription growth for Belviq, a weight-loss drug has been tremendous. It is FDA-approved and promotional activity from Eisai is boosting in sales, he said. 

Adami said Arena Pharmaceuticals is likely in "someone's crosshairs" for M&A action. With a big short interest, he called the stock "interesting" on the long side near $6.20. Kelly said the stock presents a good risk-to-reward opportunity for investors, especially for shareholders who use $6 as their stop-loss. This is a "great buy right here."

Lululemon Athletica (LULU) fell 3% and was the first stock on the show's "Pops & Drops" segment. Nathan suggested that the company may be mulling over the idea of going private as disputes between the founder and current management continue to grow. 

Anadarko Petroleum  (APC) jumped 4%. Adami said the stock is still cheap based on valuation. 

H&R Block (HRB) popped 5%. Grasso said the stock is "probably still buyable" at current levels, while the share buyback is likely to come sometime soon.

Marvell Technology (MRVL) climbed 2%. Kelly said the stock continues to trade well and he is a buyer with a $14.50 stop-loss. 

Amazon (AMZN) was added to the conviction buy list at Goldman Sachs. It was also the featured stock in the show's "Street Fight" segment. 

Kelly was the bull, arguing that a lot of positive news and good headlines are likely to drive investor sentiment -- and the stock price -- higher into earnings, which is in mid-July. Amazon continues to buy a lot of smaller companies and is getting into streaming music and fresh food delivery, which is positive. He reasoned that shares could climb to $360. 

Nathan said Amazon is a great company for consumers and has good management, but that doesn't make it a good stock for investors to own. He pointed out the company had nearly $20 billion in revenue last quarter, but only $100 million in profits. "That's pathetic." He added the stock is currently hitting resistance near $340, and investors should buy between $260 and $280. 

Adami said the stock seems likely to trade up to $345, while Grasso argued the stock continues to grow revenue extremely fast (23% year-over-year last quarter) and can worry about profits later. 

Michael Gorman, editor-in-chief for Engadget, was a guest on the show. Regarding GoPro's upcoming IPO, he said the company likely wants to keep its "cool" image going. He added that this image should also draw interest to its stock, too. While the company is likely to try staying independent, it would be a good takeover target, he reasoned. The company has built a strong brand and will likely move into media with the content it has from its customers. 

Adami agreed GoPro could have a good media business with its current content. Kelly called the stock a "tough buy" and reasoned that there is not a big enough barrier to entry to stop other large companies from doing the same thing as GoPro. 

Grasso said the concept of action cameras seems "outdated." He is not a buyer of GoPro.  

Dr. Hussein El-Ghoroury, founder, chairman and CEO of Ostendo, was a guest on the show. He said the Web has gone completely "visual" and the addition of smartphones and tablets has only accelerated the process.

He added that 1.8 billion pictures are put on the Web each day, which is in 2-D format. He reasoned that the move to 3-D is coming quickly in the form of projectable holograms from smartphones. He reasoned that it would not add that much cost into the building of each smartphone, roughly only $35 to $37, he concluded. 

For their final trades, Nathan is a buyer of eBay (EBAY) and Kelly is buying gold. Grasso is a buyer of DDD near $47.50 and Adami said to buy MRVL. 

-- 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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