'Fast Money' Recap: Is This Market Pullback a Big Deal?

NEW YORK (TheStreet) -- The S&P 500 slid 0.71% as investors' fears over Iraq began to rise, along with the price of oil, on Thursday. 

On CNBC's "Fast Money" TV show, Dan Nathan, co-founder and editor of riskreversal.com, said Thursday's price action showed the complacency among investors. He added that volatility could heat up as we head into the summer months, when trading volumes are typically light. 

Guy Adami, managing director of stockmonster.com, said the S&P 500 could trade down to 1,860, which is only a drop of 3.5%. He called this pullback "not a big deal," although other investors might react differently. ConocoPhillips (COP) is a stock investors can own, with a stop-loss at $80, he said. 

Karen Finerman, president of Metropolitan Capital Advisors, said she is not worried about the short-term price moves in WTI crude oil, which climbed 2.36% to $106.86 per barrel. She is not selling her long positions, yet, she added. 

Pete Najarian, co-founder of optionmonster.com and trademonster.com, pointed out that the CBOE Volatility Index (VIX.X) is still near historic lows, despite jumping 8% on Thursday. He disagreed with Adami that the S&P 500 would decline to 1,860, but said investors could stay long stocks when buying protection. 

Intel (INTC) boosted its second quarter revenue guidance. Najarian said he would use the stock price's jump to take profits. Nathan agreed, saying he wouldn't "chase" the stock at current levels. 

Anthony Grisanti, founder and president of GRZ Energy, said the violence in Iraq needs to move toward the southern part of the country to have any negative effects on oil production. He added that commodity investors do not like uncertainty, which can cause them to push prices too high as they overreact to headlines. He reasoned the highest level WTI crude oil appears to be going is at $112 per barrel. 

As a result of higher oil prices, airline stocks have been getting punished.

Bob McAdoo, managing director at Imperial Capital, said airline companies may take a slight hit during the summer season, as profits become hindered by higher energy costs. However, the fall season should be fine, he reasoned, because the airlines will be able to adjust their flights and flight counts in an attempt to counter higher prices, if oil does not drop by then. While the airlines may struggle over the next 8 to 12 weeks, they should still have a very good year, he concluded. 

Adami said the airline industry is doing the best it has ever done, operationally. He reasoned that investors could buy Delta Air Lines (DAL) at current levels.

Najarian said the selloff in airline stocks have been a "huge overreaction." He still sees a great opportunity in owning stocks such Delta Air Lines, United Continental (UAL) and American Airlines (AAL). 

Oliver Chen, senior research analyst at Citigroup, was a guest on the show. He downgraded shares of Lululemon Athletica (LULU) to hold from buy but did not downgrade the stock to a sell because there is takeover potential. He reasoned that VF Corp. (VFC) could be a viable acquirer, or Lululemon Athletica could be taken private, with the founder owning 26% of the company currently. He added that the company still can expand into Europe, which is a positive. 

Adami said shares of LULU are starting to look attractive on the long side near current levels. 

Nathan suggested that perhaps customers, and women in particular, are choosing Under Armour (UA) products over Lululemon products. He said investors will likely have a chance to buy it lower. 

Najarian reasoned that shares of LULU have plenty of upside potential if the company can turn around its slumping operations.

Finerman said she is short shares of Coach (COH), which report earnings next week. It could be a "kitchen sink" kind of quarter, she said, meaning the new CEO may lower the bar and reset expectations for investors and analysts.

Adami said the "risk-reward" in GameStop (GME) looks attractive, as the stock could pop to the low-$40s. He suggested using a stop-loss near $35. 

Najarian said he likes Whole Foods Market (WFM) on the long side for the long term. He suggested that the company could grow to 1,200 stores in the U.S., more than triple the roughly 350 current stores.

Nathan called Tesla Motors (TSLA) CEO Elon Musk "one of the most innovative leaders" after he opened up the company's patents for other companies to see in order to advance the development of electric car building. While the stock is acting well near $200, he said investors should hope for a pullback to $150 or $160 before buying. 

Amazon (AMZN) announced free streaming music for Prime members. Adami said investors can buy the stock, which looks poised to run toward $345. 

Finerman said Sycamore's 10% stake and possible attempt at a takeover in shares of Express (EXPR) should bode well for the "crappy retailers," because investors may think one of them will be next.

Neil Doshi, an analyst at CRT Capital, was a guest on the show. He has a hold rating on shares of Twitter (TWTR) with a $45 price target. He said CEO Dick Costolo will have a more active role on the product side of the business, which should be beneficial to shareholders. He added that Twitter is becoming more event-focused, which is noticeable by its participation in the World Cup. He said this involvement, as well future involvement in other events, could lead to user growth. 

Nathan agreed with Doshi's assessment of potential user growth. He added the company would benefit from more advertisers coming to the platform, but Twitter will likely shed more light on this topic when it reports second quarter guidance. 

Adami said shares of Facebook (FB) seem poised to move toward $75, and he is a buyer of FB over TWTR. 

Lands' End (LE) jumped 8% and was the first stock on the show's "Pops & Drops" segment. Najarian said the company is doing a good job and the stock "is going higher." 

SFX Entertainment (SFXE) fell 2%. Finerman said she would rather own Live Nation Entertainment (LYV). 

Keurig Green Mountain (GMCR) popped 4%. Nathan said there are rumors that Coca-Cola (KO) will take another stake in the GMCR, or possibly buy the company altogether. 

Rio Tinto (RIO) dropped 3%. Adami the stock could fall to $40 if it cannot find support near the $51 level.

Jonathan Weinbach, executive producer of new Xbox series Every Street United, was a guest on the show. He said the series will premiere this Sunday, and one episode per week will be released until early August. More content is in demand from consumers, he said, hence why other companies, like Netflix (NFLX) and Yahoo! (YHOO), are creating their own.

Each trader selected their "World Cup Pick" for which country's equity market will return the most over the next month.

Najarian was a buyer of the Market Vectors Russia ETF (RSX) and Nathan is a seller of the SPDR Euro Stoxx 50 ETF (FEZ). Finerman is a buyer of the iShares MSCI Brazil Capped ETF (EWZ) and Adami is a buyer of the iShares MSCI Germany ETF (EWG). 

Nathan said investors can stay long Advanced Micro Devices (AMD) with a $4 stop-loss. 

Finerman said investors can buy Bank of America (BAC).

For their final trades, Najarian is a buyer of BP plc (BP) and Nathan is a buyer of TWTR. Adami is a buyer of Canadian Natural Resources (CNQ) and Finerman suggested a pairs trade that involves the buying of Allergan (AGN) and the selling of Vertex Pharmaceuticals (VRTX). 


-- 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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