The Trading Down Trade

Economy got you down? Don’t feel bad, it’s got just about everybody down. Trading down that is.

Whether you're swapping a sirloin steak for a sardine sandwich or foie gras for french fries, chances are you're getting clobbered by the downturn.

In fact we all are. And that’s just the kind of trend that Jon Najarian thinks you should trade!

He says the trend is particularly relevant in the restaurant space. In fact he thinks the bearish sentiment that's dragged down many dining stocks may be overdone.

As a result, he's got his eye on casual restaurants that have huge short interest in their stocks. (In other words he's watching stocks that an unusually large number of investors are betting could go down.) If the speculators are wrong, Najarian sees a powder keg to the upside as they're forced to cover.

Najarian explains short covering is the phenomenon that sent Buffalo Wild Wings hurtling higher on Thursday. And as a result he's put another restaurant stocks on his radar. “Keep an eye on PF Changs ,” he says. “It’s got a short interest of 31%. It could move to the upside very quickly.

Also he’s also watching Chipotle as well as Aeropostale and The Buckle in the retail space – all because they have a large amount of short interest.

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Trader disclosure: On Feb. 12th, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Najarian Owns (CAT) Call Spread, (ENER) Call Spread, (EEM) Call Spread, (GDX) Call Spread, (GLD) Call Spread; Najarian Owns (CHK) Put Spread; Najarian Owns (FCX) & (FCX) Calls; Najarian Owns (GS) Calls; Najarian Owns (MSFT) & (MSFT) Short Calls; Najarian Owns (MS) & (MS) Short Calls; Najarian Owns (MOS) Call Spread; Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Finerman's Firm Owns (DNA) & (DNA) Call Spread; Finerman's Firm Owns (MSFT), (UNH); Finerman's Firm Is Short (IYR), (IJR), (IWM), (MDY), (SPY), (COF), (USO), (BBT); Macke Owns (RIMM), (AAPL), (MS), (TM), (SDS)

J. Najarian Owns (BWLD); J. Najarian Owns (CMG); J. Najarian Owns (ANF) Calls