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Go Against the Grain

Monday, 24 Mar 2008 | 7:31 PM ET

Don’t trade with the masses. Chart expert Carter Worth explains how to fight the crowd in financials and materials.

As investors move into financials, it might seem tempting to follow. Don't. Historical charts of the financials against the S&P 500 show that the smarter trade is to sell the rallies in these stocks.

The opposite is true for material stocks. Similar charts make Worth think that the best bet there is to buy the dips. He is especially bullish on Arch Coal , which is currently undergoing a major bearish-to-bullish reversal.

Jon Najarian seconded Worth’s outlook. ACI is a buy.

Karen Finerman said her firm sold some financials, including Fannie Mae.

Jeff Macke agreed with the “buy what you can use” call on the materials stocks. Gold is useless, he said, but names like U.S. Steel are just warming up.

Tim Seymour has a basket of material names he thinks are worth looking into: Arcelor Mittal , the Market Vectors Coal ETF , BHP Billiton and Vale .

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Trader disclosure: On Mar. 24, 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), (ATVI); Seymour Owns (AAPL), (F), (INTC), (MER), (MSFT), (SBUX), (TOL), (TSO), Seygem Asset Management owns (EEM), (CHT), (EWT), (TSM); Finerman Owns (GS), Finerman’s Firm Owns (PM-WI), (PLCE), (AAPL), (FLS), (MSFT), (SUN), (TSO), (VLO), (WMT), (YHOO), Is Short ( IYR), (IJR), (MDY), (SPY), (IWM), (GLD); Jon Najarian Owns (AAPL), (ACI), (AG), (AGU), (GOOG), (GS), (MON), (MOS), (POT), (USB), (IDCC), (EK), Is Short (BVF), (TGT)

  Price   Change %Change
ACI
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BHP
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FNMA
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KOL
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MT
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RIO
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X
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