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Halftime Report: Is Goldman Still A Buy For 2010?

On Tuesday, the traders were carefully gaming bank stocks after widely followed analyst Meredith Whitney cut 4th quarter estimates on Goldman Sachs to $5.50 from $6. It’s the second cut she’s made since Dec. 17th. And she also cut full year 2010, 2011 and 2012 estimates.

Is Goldman still a buy for 2010?

Instant Insights with the Fast Money trader

Meredith Whitney isn’t the first analyst to cut estimates, explains Fast Money trader Pete Najarian. And part of the current bearishness in Goldman and other financial firms stems from the light trading volume we saw December. (Less volume means lower revenues.)

However, considering the stock's recent slide I think a lot of the news is already priced into Goldman, Najarian adds. Going forward if they still have the earnings power that I think they do, it’s a cheap stock with potential for great upside.

We entered Goldman when it broke its downtrend last week, explains Scott Redler of T3. Meredith Whtiney’s call might trigger some profit taking but I don’t think you have to worry about the fundamental thesis. I’m also a buyer of Goldman on dips as well as other banks over the next few weeks.

In the banking sector, I’m watching Citi, reveals JJ Kinahan of TD Ameritrade. Aggressive buying of the January 5 and January 7.5 2011 calls seems bullish to me.

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SECTOR TRADE: AUTOS

The Fast Money traders are closely watch the action in the auto sector after Ford said it sold a total of 184,655 vehicles last month, easily outstripping expectations. That’s up about 23% over the same month last year.

What’s the trade?

I’ve been playing the auto parts stores such as AutoZone, reveals Patty Edwards. But in light of Ford’s results I think you also should be watching Ford stock too.

I’d go with the momentum play and that’s Ford, adds Pete Najarian.

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TAKE YOUR POSITION: GOOGLE

As we mentioned yesterday, investors are buzzing about Google's new smartphone, called the Nexus One and touted by some as an iPhone killer.

According to the website Gizmodo, the phone will cost about $530 unlocked or $180 with a two-year lock-in with T-Mobile.

Is Google a buy on the news?

I don’t think the Nexus One is a game changer, reveals OptionMonster Jon Najarian. An unlocked phone for over $500 doesn’t seem like something the public is crying for.

But Google has a strong fundamental story, reminds Pete Najarian. I’d remain bullish.

If Google can hold above $629 on the release, technical analysis suggests it could move to $650, explains Scott Redler.

On Monday’s Fast Money widely followed analyst Mark Mahaney said the new smartphone could expand Google’s mobile search business and he was bullish on Google for mobile search.

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FAST & FURIOUS: THE KEY QUESTIONS INTO THE CLOSE

BUY PHARMA ON DIP? With biotech and big pharma trading lower despite upgrades for some drug makers, how should you trade?

I’m a buyer of the dip, says Pete Najarian. It’s an opportunity.

BUY FAMILY DOLLAR? Considering Family Dollar reports earnings on Wednesday, how should you game the stock?

I think it's okay to get into it here, says Patty Edwards.

ADP EMPLOYMENT REPORT TOMORROW: With employment the missing link in the recovery, how should you trade in the wake of Wednesday’s ADP number?

I’d hedge ahead of ADP and the jobs number, says JJ Kinahan.

BIG ‘CES’ TECH CONFERENCE STARTS: What’s the tech trade as the Consumer Electronics Show gets underway later this week?

Apple is my favorite name in tech, says Scott Redler, but VMW looks very interesting here. If it triggers above $44 on strong volume I think it could make a big move higher.

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CALL THE CLOSE

Pete Najarian: I'm a reluctant buyer into close.

Patty Edwards: Pick carefully but I’d be long.

JJ Kinahan: I’m a reluctant buyer.

Scott Redler: I’m a buyer into the close.


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Trader disclosure: On Jan 5th, 2010, 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), (C), (GS), (INTC), (BTU), (MSFT), (NUE); Najarian Owns (BG) Call Spread; Najarian Owns (BP); Najarian Owns (CLF); Najarian Owns (MRVL); Najarian Owns (MS); Terranova Owns British Pound Futures; Terranova Is Short Crude Oil Futures; Terranova Owns (BAC); Terranova Is Short (CMA); Finerman's Firm Owns (CBY); Finerman's Firm Is Short (KFT)

Add'ls Disclosures for For Joe Terranova
Terranova Works For (VRTS)
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 (DBV)
Virtus Investment Partners Owns More Than 1% Of (UA)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (SKT)

For Gene Munster
Piper Jaffray Is A Marekt Maker In (AAPL), (GOOG), (EBAY), (YHOO), (AMZN)

For Craig Berger
FBR Capital Markets Is A Market Maker Or Liquidity Provider For (ONNN)
FBR Capital Markets Is A Market Maker Or Liquidity Provider For (INTC)
FBR Capital Markets Is A Market Maker Or Liquidity Provider For (BRCM)
FBR Capital Markets Is A Market Maker Or Liquidity Provider For (NVDA)
FBR Capital Markets Is A Market Maker Or Liquidity Provider For (MRVL)
FBR Capital Markets Is A Market Maker Or Liquidity Provider For (LLTC)
FBR Capital Markets Is A Market Maker Or Liquidity Provider For (MXIM)
FBR Capital Markets Is A Market Maker Or Liquidity Provider For (ATML)
FBR Capital Markets Is A Market Maker Or Liquidity Provider For (LSI)
FBR Capital Markets Is A Market Maker Or Liquidity Provider For (SLAB)
FBR Capital Markets Is A Market Maker Or Liquidity Provider For (MSCC)
FBR Capital Markets Is A Market Maker Or Liquidity Provider For (QCOM)
FBR Capital Markets Is A Market Maker Or Liquidity Provider For (ATHR)


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AAPL
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