Housing plays should continue to move higher into year's end, Steve Grasso, director of institutional sales at Stuart Frankel, said on Tuesday's episode of CNBC's "Fast Money" TV show. He is long KB Home (KBH) and said Home Depot (HD) has slightly more upside.
Sell Home Depot and buy Lowe's (LOW) , said Guy Adami, managing director of stockmonster.com. "I'd be careful," he added, in regards to PulteGroup (PHM) , which has rallied to $21 from a recent low of $17.
An improving labor market and lower interest rates should help the housing market, according to Tim Seymour, managing partner of Triogem Asset Management. His top pick was Beazer Homes (BZH) .
Karen Finerman, president of Metropolitan Capital Advisors, pointed out the auto industry has rallied strongly over the past few years, reaching pre-recession sales levels. It's surprising the housing market has had a similar move, she noted.
The conversation quickly shifted to a macro theme, when Raoul Pal, publisher of the Global Macro Investor, said that oversupply will likely remain an issue for oil prices. The lack of demand doesn't help either, but the biggest downward pressure that still exists is the U.S. dollar.
The U.S. dollar is likely to continue to move higher and when coupled with the supply and demand metrics for crude, West Texas Intermediate could drop as low as $30 to $40 per barrel, he reasoned. As for other currencies, the Japanese yen and the euro are likely to move lower as central banks in each region continue to look at stimulus as a means for boosting economic activity.
Seymour agreed that the U.S. dollar is likely to continue higher, which is why he sees gold breaking below $1,100 per ounce. Investors can also sell the CurrencyShares Canadian Dollar ETF (FXC) and the CurrencyShares Australian Dollar ETF (FXA) .
Based on declining oil prices, Grasso said investors could consider buying natural gas stocks.
The trading panel turned their attention away from currencies and toward China's Single's Day event. Specifically, they took a look at Alibaba (BABA) after the company record $9.36 billion in revenues for the holiday, which takes place on November 11th.
Stay long, Seymour advised. Tuesday's pullback isn't a surprise and while there isn't "a ton of value left" with the stock near current levels, the long-term growth justifies the price.
Grasso added that he remains long Yahoo! (YHOO) as a means to play Alibaba, since the former owns a 16% stake in the latter. Finerman added that she is long Alibaba, but looking to buy on a pullback below $110.
Amazon (AMZN) has had a nice rally, Adami said, but it's time to take profits now that the stock is near its current downtrend levels.
Speaking of Amazon, it was one of Paul Hickey's top retail picks. The co-founder of Bespoke Investment Group also likes Children's Place (PLCE) and Cato (CATO) ahead of the holidays. However, retail stocks tend to outperform the S&P 500 between now and Thanksgiving, and actually underperform the index between Thanksgiving and New Years, he said.
Finerman added that customers of Children's Place will benefit from lower gas prices. The stock has a low valuation and the company has a lot of cash, she said.
Best Buy (BBY) could outperform this holiday season, Grasso and Seymour suggested.
-- Written by Bret Kenwell