'Fast Money' Recap: Protecting Yourself Before the Next Fed Meeting

NEW YORK (TheStreet) -- The S&P 500 eked out a gain, closing higher by 0.09% on Thursday. 

On CNBC's "Fast Money" TV show, Brian Kelly, founder of Brian Kelly Capital, said the Federal Reserve seems unlikely to do anything that will disrupt the economy during its announcement next week. The stock market should continue to do fine, so long as interest rates and inflation stays low. 

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Tim Seymour, managing partner of Triogem Asset Management, said the Federal Reserve will likely be slightly more "hawkish" than investors may be expecting for next week. The strong U.S. dollar is not a positive for the stock market. 

Guy Adami, managing director of stockmonster.com, said the rally in the iShares 20+ Year Treasury Bond ETF (TLT) is likely to continue while Treasury yields are poised to go lower. 

Pete Najarian, co-founder of optionmonster.com and trademonster.com, said investors could consider a long position in the CBOE Volatility Index (VIX.X) as a form of protection going into next week's Fed meeting. However, he remains bullish on the stock market and called a pullback a good buying opportunity.

WTI crude oil hit a 16-month low on Thursday before rallying sharply and ending the day higher. Kelly said 12-month future contracts are roughly equivalent to today's oil prices, while 16-month future contracts are roughly 7% higher than today's prices. This suggest that oil will go higher in the longer term and the "glut" of supply is only temporary. 

Adami said investors can stay long Anadarko Petroleum (APC) and Exxon Mobil (XOM) . Seymour said crude oil is likely headed lower, as is Tesoro (TSO) . 

Jason Helfstein, media and Internet analyst at Oppenheimer & Company, said Alibaba has very impressive revenue growth of 41%, while margins stand at a solid 50%. This stock is going to be a "winner," he said. If there is really that much demand for the stock then it is undervalued, based on its current valuation. If the valuation goes higher, so will Yahoo!'s (YHOO) stake, and therefore, so will its stock. Currently, he has a $43 price target on Yahoo!, but said it could move up to the high-$40s. 

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Seymour said he is taking off half of his long position in Weibo (WB) , which has run 25% higher in a matter of days. This is an "exciting time" for Chinese Internet stocks, he added.

Najarian reasoned that Yahoo! is likely to go higher, possibly to $50. He pointed out the bullish options activity in the November and January $45 call options. 

Kelly said that shares of Lululemon Athletica (LULU) appear to have bottomed. If the stock can hold the $42 level for several trading sessions, it's a buy. 

Adami said the company reported a good earnings report with solid margins. He is a buyer, as is Najarian. 

Seymour likes the direction the CEO is taking Sprint (S)  but he said he would not "chase" the stock near current levels. Kelly agreed, saying investors should wait for a pullback before buying. 

CNBC's Meg Tirrell was a guest on the show. Shares of Orexigen Therapeutics (OREX) dropped 10.5%. She attributed this drop to the company's decision to run a second cardiovascular outcomes trial for its weight-loss drug, Contrave, which could cost upwards of $200 million. Investors likely didn't see a second test coming and that's why the stock sold off. However, it could wind up being a good thing for the company as it may help in its type II diabetes approval. 

Adami said investors who can stomach the volatility can consider buying shares of Orexigen near current levels. 

Andy Hargreaves, senior research analyst at Pacific Crest Securities, downgraded shares of Apple (AAPL) to sector perform from outperform but maintains its $100 price target. He said the company may struggle in 2016, once many customers have upgraded to the new iPhone. Eventually the market will become too saturated and meeting expectations will become difficult. Therefore, the earnings multiple is likely to contract. 

Najarian said he did not like the price of the Apple Watch but believes the new iPhone will do very well. He reminded investors that China will likely be a large growth driver for the company. Adami said shares of Apple seem likely to pullback toward $88 per share. 

U.S. Steel (X) climbed 5% and was the first stock on the show's "Pops & Drops" segment. Adami said the company has strong pricing power and the stock still has more upside. 

Read More: Why Ciena's Recent Selloff Means a Strong Buying Opportunity

BlackBerry (BBRY) jumped 5%. Kelly said he is long and still likes the stock. 

Pandora (P) popped 3%. Najarian said investors can stay long but should do it via options to limit their risk. 

Alcoa (AA) dropped 2%. Seymour suggested the stock is facing some resistance near $17.50. Investors should wait for a pullback before buying the stock. 

When asked to choose between Burger King (BKW) and McDonald's (MCD)  Seymour, Adami and Najarian all chose McDonald's. 

Najarian pointed out the very bullish options activity in WhiteWave Foods (WWAV) . Specifically, he said the January $42 call options have seen bullish activity for several days, while traders are also selling downside puts, another bullish strategy. It's a "very aggressive positioning for upside," he said. 

Donald Trump Jr., executive vice president for the Trump Organization, said high-end luxury is doing well in emerging markets, especially in real estate. Specifically Brazil, Russia, India and China are the most robust in terms of increased demand. 

Seymour said the demand is not surprising as luxury demand in emerging markets continues to do well, even for names like Tiffany & Company (TIF) . Luxury stocks are worth owning, even with higher interest rates, he said. 

Michael Small, CEO and president of GoGo (GOGO) , said the company's latest deal with T-Mobile U.S. (TMUS) will allow users to text and receive voicemails while on their flights. The company wants to be able to increase the number of partnerships for similar plans. The company's goal is to engage everyone on the flight, he concluded. 

Adami said investors can stay long GoGo, which is rumored to be a possible takeover target by Verizon Communications (VZ) . Seymour agreed, saying the stock looks poised to move higher. 

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For their final trades, Kelly is a buyer of SVB Financial Group (SIVB) and Najarian is buying Goldman Sachs (GS) . Seymour said investors can buy the iShares Emerging Markets ETF (EEM) at $40 as well as after the Federal Reserve meeting has concluded. Adami is a buyer of Lululemon Athletica. 

-- 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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