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A Revitalized Credit Card Industry?

In Monday's rally, the sector topping the tape was Financials , and leading the way were credit card stocks, notably American Express, Discover and Capital One. These moves to the upside were supported by positive news coming out of the sector, including Discover saying that net charge-offs were not getting worse, and a credit card confrence which offered positives for the credit card industry.

"Consumer credit quality has clearly improved over the last few months," says Joe Terranova. These names have been underloved, he says, with names like Mastercard and Visa performing "phenomenally," but he suggests out of everything, JPMorgan , which has exposure to not only credit cards, but investment and consumer banking.

The story has improved and this is a great environment, says Tim Seymour, who points out that with a steeper yeild curve, companies like JPMorgan are set to benefit significantly. Despite credit concerns that are out there, the environment is right to be a bank, he says.

With a sweet yeild curve, Karen Finerman agrees that big banks are set to profit, but identifies loan-loss provisions as the key to huge gains and profitability. If the consumer comes back, Finerman thinks nobody stands to profit as much as Bank of America, who has "enormous consumer books."

But if the consumer is not coming back, you want to know where your exposure is, adds Pete Najarian, who maintains that credit card names like Mastercard and Visa are the plays to make, which are two stocks near their 52-week highs. This way, you have a pure play focused on credit card transactions, he says.

For these trades, and a technical analysis of how you should be playing the US dollar, check out the video!


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Trader disclosure: On November 9th, 2009, 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 (BP) Calls, (FCX) Put Spread, (RIMM) Call Spreads, (UUP) Calls, (YHOO), (YHOO) Puts; Finerman's Firm Is Short (IJR), Short (MDY), Short (SPY), Short (IWM), Short (USO), Short (UNG), Owns (CBY), Short (KFT), Owns (MSFT), Owns (PM), Owns (TGT),Short (UNG), Short (USO), Finerman's Firm And Finerman Own (WFC) Preferred, Finerman's Firm Owns (WMT), Owns (YUM); Terranova Owns (GS), (WYNN), (JPM), (SU), (MRVL), (BRCM), (GOOG), (RIMM), (AAPL), VIX Nov. 24 Puts, Terranova Works For (VRTS); Seymour Owns (AAPL), (EEM), (F), (FXI), (TM), (VIP), (POT), Najarian Owns (INTC), (INTC) Calls, Finerman's Firm And Finerman Own (RIG), Finerman's Firm And Finerman Own (PDE), Finerman's Firm Owns (M)
Najarian Owns (JWN) Calls, Finerman's Firm Owns (BAC) Preferred, (BAC), (BAC) Call Spreads
Finerman Owns (BAC) Preferred, (BAC), Najarian Owns (BX) Calls

Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.

Virtus Investment Partners Owns More Than 1% Of (CLB)
Virtus Investment Partners Owns More Than 1% Of (DLR)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (DBC)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (UA)

DENNIS GARTMAN Funds Managed By Dennis Gartman Own (EWZ)Funds Managed By Dennis Gartman Own (EWA)Funds Managed By Dennis Gartman Own (EWC)Funds Managed By Dennis Gartman Own (EWZ)Funds Managed By Dennis Gartman Are Short U.S. DollarFunds Managed By Dennis Gartman Own Gold In U.S. Dollar Terms, British Pound Sterling Terms, Euro Terms TAVIS MCCOURT ***NO DISCLOSURES ON AAPL, MOT, PALM, RIMM BRIAN KELLY Kelly And Kanundrum Capital Own (UUP)Kelly And Kanundrum Capital Own (USO)Kelly And Kanundrum Capital Own (TDW) ***NO DISCLOSURES ON CRUDE OIL, U.S. DOLLAR, GOLD

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