Halftime Report: Gobble Up Goldman On The Dip?
Bank stocks slipped on Thursday after quarterly results from Goldman Sachs and Citigroup failed to live up to heightened expectations.
Although both banks produced great numbers, the results didn’t compare to those reported by JPMorgan one day earlier. And investors drove the Dow above 10,000 on hopes other banks would follow suit.
Where are the opportunities in this tape?
I like Goldman on a pullback, reveals technical analyst Greg Troccoli of Opalesque. I’m a buyer at $185 which is the stock’s 21-day moving average. As for Citi, I can’t get excited even if it pulls back to $4.
I’m also a buyer of Goldman, says Fast Money trader Joe Terranova, though I too would like to see it pullback. If the market goes higher I think Goldman goes higher too.
Goldman is up over 120% for the year, reminds Jeff Tomasulo of SMB, but I like the name. 185 seems like a good entry point.
Elsewhere in the sector, I expect a bit of a surprise in BofA earnings, muses Eugene Profit of Profit Funds, especially coming from their Merrill unit. I expect to see returns from trading the proprietary accounts.
TAKE YOUR POSITION: GOOGLE
All eyes are on Google with the Internet giant reporting earnings on Thursday after the bell.
Analysts surveyed by Thomson Reuters expect Google to earn $5.40 per share on revenue of $4.23 billion. The estimates exclude Google's expenses for employee-stock compensation, unusual charges and the revenue that the company pays its advertising partners
What’s the trade?
I’d stay long, counsels Joe Terranova. I expect good things from this stock going forward.
With Google trading at a mid-20’s P/E I think it’s okay to hold the stock, adds Eugene Profit.
I wouldn’t be betting on a big upside move post earnings, says Citi analyst Mark Mahaney on Wednesday’s Fast Money. Going forward you need to watch the impact from mobile smartphones as well as profitability out of YouTube and real expansion in margins. That’s what will take shares higher. I don’t think we see it on Thursday although I do expect to see it over the next year.
I think if you’ve missed Google’s move, you should wait, echoes Guy Adami. Don’t jump in on Thursday.
If you're looking for other tech trades, elsewhere in the space, I’d look at Amazon and Ebay , adds Profit.
OIL CONTINUES CLIMB HIGHER
Oil rose toward $76 a barrel on Thursday in its sixth straight session of gains after a government inventory report showed large drops in gasoline and distillate stocks, surprising the market.
What’s the trade?
I’d stay with this trade, counsels Joe Terranova. It seems to me that oil is breaking out. I’m also a buyer of oil services names.
Patterns in the weekly chart of oil suggest if it settles above $76 on Friday, it clears the way for a move toward $89 barrel, explains technical analyst Greg Troccoli.
OPTIONS ACTION: IBM
Brian Stutland of Stutland Equities has spotted unusually heavy options activity in IBM ahead of earnings later today.
Stutland sees heavy call buying at the money, which suggests to him that any earnings move is already priced into the stock. As a result, Stutland thinks the company’s beat would have to be extreme to generate any big moves.
FAST & FURIOUS: THE KEY QUESTIONS INTO THE CLOSE
BUY AMD? With AMD reporting after the bell today, should you buy ahead of results?
No, I’m not a buyer until they turn a profit, says Joe Terranova.
BUY GE?GE reports earnings ahead of the bell tomorrow, should you buy?
I’d stay on the sidelines, reveals Greg Troccoli.
BUY HAL? Energy giant Halliburton reports earnings before the bell tomorrow, should you get in?
I’m not a buyer of HAL, says Eugene Profit, but with the price of crude rising I like oil services space.
BUY JPM? Considering Fox-Pitt Kelton upgraded JP Morgan to Outperform , should you buy?
I’d wait for the stock to pullback to $46, counsels Jeff Tomasulo.
TRADE TO GO: ENERGY PLAY
Joe Terranova suggests putting refiners on your radar. Sunoco , Holly Corp and Frontier are all worth a look, he says.
CALL THE CLOSE
Joe Terranova: I’m a buyer.
Greg Troccoli: I’m a seller.
Eugene Profit: I’m a seller.
Jeff Tomasulo: I’m a seller.
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Trader disclosure: On October 15, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT): Terranova Owns (SUN), (OIH), (HOC), (HES), (GOOG), (IUYG), (OHI), (FTO): Terranova Is Short (GRMN), (CCL): Najarian Owns (BX) Calls; Najarian Owns (DELL) Call Spread; Najarian Owns (GE) Calls; Najarian Owns (GOOG) Nov. Calls, Is Short (GOOG) Oct. Calls; Najarian Owns (HMY) Calls; Najarian Owns (IBM) Nov. Calls, Is Short (IBM) Oct. Calls; Najarian Owns (LAZ), Is Long (LAZ) Puts, Is Short (LAZ) Calls; Najarian Owns (MYL) Calls; Najarian Owns (RIMM) Call Spread; Najarian Owns (STX) Call Spread; Najarian Owns (TEVA); Najarian Owns (YHOO) Call Spread
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