'Fast Money' Recap: What Market? The Focus Remains on Apple


NEW YORK (TheStreet) -- The S&P 500 was able to rally on Wednesday, closing up 0.78%. 

However, the trading panel on CNBC's "Fast Money" TV show discussed Apple (AAPL) instead, which fell 1% on the day after the company announced it will discontinue its iOS 8 update for the time being. 

Guy Adami, managing director of stockmonster.com, thinks the stock is likely to drift lower in the coming weeks. Aside from the buyback, the fundamentals for Apple look eerily similar to September 2012 when the stock previously topped out. 

Must Read: 10 Stocks George Soros Is Buying

Karen Finerman, president of Metropolitan Capital Advisors, said Apple trades in "its own bubble" and is not easily influenced by the rest of the market. She added that the iOS 8 issue should be resolved shortly and it does not change her bullish view on the stock. 

Dan Nathan, co-founder and editor of riskreversal.com, said this issue should not force investors to sell the stock. He said investors long the stock should consider taking some profits or use a stop-loss near the 50-day moving average. 

Josh Brown, CEO and co-founder of Ritholtz Wealth Management, remains bullish on Apple. He argued that the stock trend is intact and remains above both the 50-day and 200-day moving averages while having a low valuation.

Adami said Celgene (CELG) , Amgen (AMGN) and Gilead Sciences (GILD) can continue to move higher. Brown agreed, saying he likes the biotech sector's effect on the markets. 

Nathan said he's curious to see how Nike (NKE) does in its upcoming earnings report. Lower fuel costs should help, but a strengthening U.S. dollar may be a headwind because more than half of the company's sales come from outside the U.S. 

Adami said investors can stay long shares of Jabil Circuit (JBL) . The company reported good operating margins and the stock has a low valuation. It looks like it's on its way to $26. 

Paul Hickey, co-founder of Bespoke Investment Group, said the stock market tends to trade well in the following quarter after a 5% or more increase in the U.S. dollar. The sectors that generally do well in that period are materials, industrials and energy. He likes ConocoPhillips (COP) , Northrop Grumman (NOC)  and Dow Chemical (DOW) . 

Nathan said he remains long AT&T (T)  because all of its revenue come from within the U.S., so a strong U.S. dollar will not hurt the company. It also has an attractive dividend. If the United States Oil ETF (USO) can hold $34, he also likes this on the long side. 

Must Read: What Would John Malone, Cable Cowboy, Do to Boost Yahoo!'s Stock?

Adami said ConocoPhillips looks to be "building a base" near $78. The stock offers good risk/reward on the long side. 

Finerman said she likes Goodyear Tire & Rubber (GT) and Flowserve (FLS) on the long side.

Peter Keith, senior research analyst at Piper Jaffray, has a buy rating on shares of Best Buy (BBY) with a $34 price target. He said Apple's iPhone could give the retailer at 1% to 2% boost in same-store sales for the third quarter. He said the new phone wouldn't take away from sales in other parts of the store because it represents such a small amount of holiday spending. The iPhone will improve traffic, which could benefit revenue, he concluded. 

Finerman said her top retail pick remains Macy's (M) . Brown agreed, saying he does not think J.C. Penney (JCP) has turned the corner yet. 

Adami said Lululemon Athletica (LULU) looks good on the long side. Brown disagreed, saying the brand is "done" and investors should sell the rallies in the stock. 

Adami said KB Home (KBH) should have pre-announced its earnings report because it was so bad. But with a big short-interest and support near $16, he said investors can go long the stock with a stop-loss near $15.50. Nathan disagreed, saying he would not buy the homebuilders near current levels.

Brown said he likes Starbucks (SBUX) on the long side because it's acquiring the rest of Starbucks Coffee Japan that it doesn't already own, roughly 60.5%. The company still has a lot of potential in Japan, he reasoned. 

Adami agreed. He said that although shares of Starbucks have been more volatile than usual this year, investors can use nearby support of $74 for their long entry. Nathan said he would sell shares of Starbucks near current levels because the stock has not traded well this year, despite the good news. 

Ben Kallo, senior analyst at R.W. Baird, was a guest on the show. Shares of SolarCity (SCTY) are down roughly 12% since he downgraded the stock to neutral in August. He says the company is taking on more risk by getting involved in panel manufacturing. Also, rising interest rates pose a risk to the company. He prefers shares of SunPower (SPWR) . 

On Tesla Motors (TSLA) , Kallo has an outperform rating on the stock with a $275 price target. He said the stock is a buy on pullbacks. He suggested that margins will expand as the company grows both earnings and revenue.

Adami said shares of SolarCity should have traded better on Wednesday. Because they did not, the stock seems likely to head lower. He prefers Tesla, but closer to $225. 

Must Read: What Starbucks, Pepsi and Walmart Did to Control Their Destinies

Brown is a buyer of Tesla, but said that the next-closest level of support is at the 200-day moving average, near $210. Over the long term this seems like a great stock to buy. 

Nathan said he would chose Tesla over SolarCity. He likes it for the long-term, but is hoping to buy the stock near $200. 

Walmart (WMT) climbed 2% and was the first stock on the show's "Pops & Drops" segment. Adami said the stock seems likely to climb to $80. 

Sketchers USA (SKX) dropped 2%. Finerman said she would rather be long Foot Locker (FL) . 

LinkedIn (LNKD) popped 3%. Nathan said he would be a buyer of the stock near $200. 

Yahoo! (YHOO) jumped 2%. Brown noted that the stock fell some 10% within five trading sessions but has been trading on much higher-than-usual volume. He speculated that something may be going on with activist investors and said this would be an interesting stock to watch going into the fall.

Adami said investors should not buy H.B. Fuller (FUL) following the company's big earnings miss. 

CNBC's John Jannarone said Acker Merrall & Condit, which is a wine auctioneer, just had its biggest sale yet. After several months of disappointing auctions, consumers -- specifically Chinese consumers -- showed up and put down big bucks for wine. He said wine sales and Macau gaming revenue have a high correlation, suggesting that perhaps casinos that operate in Macau could see a boost in revenue. 

Nathan said he does not like the casino stocks near current levels. However, he cautioned investors not to sell them short because many of them are oversold. 

Adami said Wynn Resorts (WYNN) is slightly expensive based on valuation, but its large short-interest and oversold nature makes him a buyer. 

Nathan pointed out the bullish options activity in shares of Sun Edison (SUNE) , specifically in the October $20 call options. 

Must Read: The Numbers Behind Facebook's Fight for Premium Video Content

For their final trades, Nathan is a seller of the iShares 20+ Year Treasury Bond ETF (TLT) and Brown is a buyer of First Solar (FSLR) . Finerman is buying Google (GOOGL) and Adami said to buy Jabil Circuit.

-- Written by Bret Kenwell in Petoskey, Mich.

Follow @BretKenwell

Follow TheStreet.com on
Twitter and become a fan on Facebook.


Bret Kenwell currently writes, blogs and also contributes to Robert Weinstein's Weekly Options Newsletter.

If you liked this article you might like

Tech Stocks That Look Fairly Cheap Following the Rout

Tech Stocks That Look Fairly Cheap Following the Rout

Cramer: Today Was Just Awful

Cramer: Today Was Just Awful

Facebook Leads Sharp Decline of FANG Stocks This Week
Why the Worst May Be Over For Facebook

Why the Worst May Be Over For Facebook

Risk of More Downside Is High as Bears Finally Have Some Momentum

Risk of More Downside Is High as Bears Finally Have Some Momentum