'Fast Money' Recap: How to Trade After the Market's Drop

NEW YORK (TheStreet) -- The U.S. equity market is having its worst week since July, with the S&P 500 down 1.62% and the Nasdaq off 1.94% Thursday. 

On CNBC's "Fast Money" TV Show, Pete Najarian, co-founder of optionmonster.com and trademonster.com, noted the financial and technology sectors, which have been pretty strong the past few sessions, took a beating on Thursday. If stocks like Microsoft (MSFT) , Intel (INTC) and Hewlett-Packard (HPQ) open lower on Friday, he is a buyer. 

Guy Adami, managing director of stockmonster.com, still believes the iShares Russell 2000 ETF (IWM) is headed to $108. However, he said it will be interesting to see if it finds support there or not. The S&P 500 appears to have support near current levels. 

Jon Najarian, co-founder of optionmonster.com and trademonster.com, said the CBOE Volatility Index (VIX.X) isn't high enough right now to be in "panic mode." However, it was actually a good thing to see the market close at the lows on Thursday as opposed to bouncing slightly. 

Brian Kelly, founder of Brian Kelly Capital, said it will interesting to see if investors buy into the market following the recent pullback. He said the U.S. dollar is "way ahead of itself" and ripe for a pullback.

Pete Najarian said the strong U.S. dollar has probably not been priced into the stock prices of most companies that have international exposure. However, he still likes large-cap tech stocks, many of which have mostly domestic exposure. 

Adami said interest rates seem poised to move lower. Bonds should perform better as a result.

Dan Niles, founding partner at AlphaOne, said it seems likely that technology companies will begin issuing negative pre-announcements leading into the upcoming earnings report. He likes stocks such as Google (GOOGL) and Facebook (FB) . He also said Apple (AAPL) is improving its product offerings and will likely begin taking back market share. He is a buyer of Alibaba (BABA) and not Yahoo! (YHOO) .

Pete Najarian said he continues to like Yahoo!, which is being vastly undervalued near current levels. "I think Yahoo! has got much more upside."

Jon Najarian added that Yahoo! has been sold short by many investors as a hedge against their long position in Alibaba. Once options become available next Monday, these hedges will be taken off and shares of Yahoo! should move higher. The true value of the stock is "well north" of $50, he reasoned. 

Adami said Priceline.com (PCLN) seems likely to continue its decline, despite being cheap based on valuation. Once the stock gets near $1,087, a recent low, investors should buy it. 

Pete Najarian called Amazon (AMZN) a "no touch" near current levels due to the unattractive price action. 

Micron (MU) beat on top- and bottom-line earnings estimates. Adami pointed out the company's margins looked good and suggested investors could stay long. 

Jon Najarian said he likes Broadcom (BRCM) .

Robyn Karnauskas, biotech analyst at Deutsche Bank, said her investors should consider buying Regeneron (REGN) , which has suffered from the recent pullback but has plenty of treatments in its pipeline. 

Vertex Pharmaceuticals (VRTX) could grow revenue tenfold over the next five years and has limited expenses, meaning the company has a lot of operating leverage and earnings potential. She also likes Gilead Sciences (GILD) and Biogen Idec (BIIB) . Karnauskas referred to large-cap biotech stocks as a potential defensive play in the market. 

Pete Najarian said he likes large-cap pharmaceutical stocks as well as Amgen (AMGN) . 

Kelly said the iShares Nasdaq Biotechnology ETF (IBB) and SDPR Biotech ETF (XBI) appear have a little more downside ahead before being considered buying opportunities. 

Dana Telsey, CEO of Telsey Advisory Group, said Nike (NKE) showed an acceleration in revenue and gross margins. The company had strong inventory management and noted its e-commerce business jumped 70%. The company also had strong future orders, particularly from the U.S. and Europe. She is a buyer. 

Pete Najarian said he likes Nike's innovation, pricing power and margins. But he wants the stock to dip below $80 per share before buying. 

Jon Najarian said he is a buyer near current levels, even after the 4% after-hours pop. The positive conference call comments reminded him of Apple's conference call before the launch of its iPhone, Apple Watch and Apple Pay.

Adami said he is a buyer of Lululemon Athletica (LULU)  but admitted the company may be losing market share to Nike. 

Pete Najarian said shares of Apple seem poised to move higher. Jon Najarian sold Apple short via bearish put spreads with options, citing the "bend-gate" scandal as a possible reason to delay sales. 

Carter Braxton Worth, chief market technician at Sterne Agee, said the S&P 500 may finally be starting to follow the Russell 2000. If so, it's likely the S&P 500 could correct 11% down to 1,780 based on where longer-term trends would suggest. 

Adami admitted that a pullback may be in the cards but suggested that 1,904 would be an area of good support if it happens. 

AutoNation (AN) climbed 1% and was the first stock on the show's "Pops & Drops" segment. Jon Najarian said lower interest rates are likely helping the company's overall performance. 

Tiffany & Co. (TIF) fell 1%. Adami said investors can buy the stock with a stop-loss at $96. 

BlackBerry (BBRY) dropped 7%. Kelly said he sold his long position of stock but is still long call options headed into Friday's earnings report. 

Magnum Hunter Resources (MHR) popped 10%. Pete Najarian said investors should not "chase" the stock after this big move higher. 

Frank Holmes, CEO and CIO of U.S. Global Investors, was a guest on the show discussing gold prices. He said gold is still attractive but only in euro terms, not the U.S. dollar. He likes Franco-Nevada (FNV) and Royal Gold (RGLD)  because the companies have strong profit margins, good royalties and limited capital expenditures.

Kelly said it's odd the U.S. dollar is higher by roughly 15% in 2014 while gold is still positive. Usually these two assets have an inverse relationship and this is not showing this year. 

Jon Najarian pointed out the bullish options activity in shares of Dow Chemical (DOW) . Because of this, he is now long. Pete Najarian is long DuPont (DD) for similar reasons. 

Adami said he likes shares of Eastman Chemical (EMN) . 

For their final trades, Pete Najarian said he likes shares of Pfizer (PFE) and Kelly is a seller of the U.S. dollar. Jon Najarian is a buyer of Dow Chemical and Adami is a buyer of Vertex Pharmaceuticals. 

-- 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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