Concerns over antidepressants and cholesterol drugs loom over Big Pharma earnings coming next week. How should you trade it?
Schering-Plough and Merck were slaughtered Thursday after they were hit with with a class action lawsuit, explains Jon Najarian. Subsequently, I’ve seen massive put buying in both names.
Meanwhile the New England Journal Of Medicine reported Wednesday that there were new questions about the effectiveness of some antidepressants. That dragged down Pfizer and Wyeth .
I picked a bad day to quit anitdepressants, jokes Jon Najarian. But seriously, I think you’re going to continue to see pressure on Big Pharma – especially after Merrill took Merck off of their “focus 1” list Thursday.
Either get out of Big Pharma all together, Najarian counsels, or buy puts and try to make money on the downside.
Jeff Macke agrees. However I’d add to my position in Pfizer and Wyeth on the dip.
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Trader disclosure: On Jan 17, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (YHOO), (INTC); Pete Najarian Owns (BIIB), (C), (CSCO), (EBAY), (ETFC), (MS), (MSFT); Pete Najarian Owns (LEH) Puts; Pete Najarian Owns (AAPL) Calls, (AIG) Puts, (WM) Calls, (YHOO) Calls; Finerman Owns (GS); Finerman's Firm Owns (PLCE); Finerman's Firm Owns (MSFT) Options; Finerman's Firm Owns Russell 2000 Puts And Is Short (IWM); Finerman's Firm Owns S&P 500 Puts And Is Short (SPY); Finerman's Firm Is Short (IYR), (IJR); Finerman's Firm Is Short (MDY) Puts And Is Short (MDY); Finerman's Firm Is Short (LEH) And Owns (LEH) Puts; Finerman's Firm Is Short (HET) And Owns (HET) Puts; GE Is The Parent Company Of CNBC; Charles Schwab Is A Sponsor Of "Fast Money"