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"Fast Money" Portfolios of the Week - 3418 views
By Roberto Pedone
Posted on June 17, 2010
The traders of CNBC’s “Fast Money” think a quarter-end melt-up could be in the cards after the S&P 500 traded above its 200-day moving average for the first time in a month. On Tuesday’s “Fast Money” show, veteran trader Gary Kaminksy told viewers that he expects the melt-up to continue through the end of the quarter, which is June 30. He said that a lot of institutional money managers were caught with their pants down last week as the market pushed higher.
Joe Terranvoa agreed and said he’s bullish on the market. He mentioned that right now we’re seeing an end-of-the-quarter chase but that sentiment is changing and that’s a major shift. Dan Niles of Alpha One Capital Partners disagreed. He said he’s worried about the fundamentals of the market. Niles thinks Europe is what matters and that the cost of borrowing for the PIIGS is going up. He pointed out that the market had a nice technical move but that fundamentally nothing is getting better.
Guy Adami took a neutral stance, saying that Tuesday’s action could be seen as either bullish or bearish. He thinks it’s bullish from a technical perspective since we broke above overhead resistance. However, it could be bearish because a number of chartists are worried about the formation of a head and shoulders pattern (a bearish technical indicator) at 1130 on the S&P 500.
The “Fast Money” crew has recently highlighted trading ideas that play off a huge mineral discovery in Afghanistan, energy stocks with safe dividend yields and stocks with unusual options activity. Here are some highlights from over the past week as aggregated from the show.
Fast Money’s 4 BP Benefit Stocks: The crew thinks stocks such as Exxon Mobil (XOM) and Occidental Petroleum (OXY) could benefit from a BP (BP) asset sale. On Wednesday’s “Halftime Report” segment, Joe Terranova told viewers: “As the situation deteriorates, I think it’s entirely possible that BP divests some of its U.S. assets. And I do think the divestiture will have to meet the approval of the White House, which suggests they won’t go to China.” The Fast Money’s 4 BP Benefit Stocks portfolio includes Royal Dutch Shell (RDS.A) and Chevron (CVX).
Fast Money’s Options Trades: The traders have highlighted some options trades and unusual options activity in names such as Best Buy (BBY) and Electronic Arts (ERTS). On Monday’s “Halftime Report” segment, Pete Najarian told viewers: “A large volume of June 16 calls traded on Commercial Metals (CMC), which leads me to believe that this stock could make a share move higher.” The Fast Money’s Options Trades portfolio includes Marvell Technology Group (MRVL) and BP (BP).
Fast Money’s Afghanistan Trades: U.S. geologists have discovered vast mineral wealth in Afghanistan, possibly amounting to $1 trillion. What’s the trade? On Monday’s “Fast Money” show, Tim Seymour told viewers: “It was an interesting headline, and I would prefer investing in a company such as Ivanhoe Mines (IVN), which has enormously wealthy mining reserves in Mongolia.” The Fast Money’s Afghanistan Trades portfolio includes First Quantum Minerals (FM) and AngloGold Ashanti (AU).
Fast Money’s Energy Stocks With Safer Yields: The traders see opportunity in playing Master Limited Partnerships (MLPs) like Enterprise Products (EPD) over riskier energy names. On Monday’s “Fast Money” show, Raymond James analyst Darren Horowitz told viewers: “The sovereign debt market will have an impact on the total return on yield-based equities, including MLPs, but the magnetite of the impact from a cost of capital perspective is less than the market perspective.” The Fast Money’s Energy Stocks With Safer Yields portfolio includes Plains All American LP (PAA) and Williams Partners LP (WPZ).
Fast Money’s BP Bombshell Trades: Recently, Reuters reported that Bank of America has issued a directive that said its traders should not enter into any trades with BP past June 2011. The crew thinks this news should benefit stocks such as McMoRan Exploration (MMR) and Suncor Energy (SU). On Tuesday’s “Fast Money” show, Guy Adami told viewers: “In the energy space I’d play natural gas or McDermott (MDR). But I’d stay away from BP.” The Fast Money’s BP Bombshell Trades portfolio includes Cobalt International Energy (CIE) and W&T Offshore (WTI).