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Housing Stocks Approaching Major Threshold

Thursday, 29 Apr 2010 | 5:45 PM ET

With the home tax credit about to expire, how should you trade the housing sector?

According to a new survey, their expiration this week is unlikely to deter home purchasing activity.

Among consumers shopping for homes, 65 percent said the end of the tax credits will have little or no effect on their interest in purchasing a home, according to the survey, which was conducted by Prudential Real Estate and Relocation Services.

But 90 percent of the consumers believe that the tax credits have helped both first-time home buyers and the U.S. housing market overall.

Eligible borrowers must sign contracts by April 30 and close on their loans by June 30 to qualify for the tax credits, which include $8,000 for first-time buyers and $6,500 for home owners buying a new residence.

What’s the trade?

I’d look at Mohawk on a pull back, counsels Guy Adami. They make the carpet and other floor coverings that go into houses. And they just reported a great quarter. I know they gave tepid guidance but that tends to be their ‘MO’.

Downstream, I’d look at Louisiana Pacific and Plum Creek, adds Pete Najarian. Options action suggests they could be movers.

In this space, I like Armstrong Worldwide, adds Brian Kelly.



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Trader disclosure: On Apr 29, 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 (INTC), (GS), (AGU), (BTU), (NUE), (MSFT), (C); Karabell Owns (GOOG), (AAPL), (RIMM), (GS); Grasso Owns (NDAQ), (DYN), (LPX), (ASTM), (ABK), (BAC), (BGP), (C), (CVGI), (JPM), (NEM), (PRST), (PFE), (BA), (T), (CSCO), (X); Najarian Owns (AKAM) Call Spread; Najarian Owns (C) Calls; Najarian Owns (CBS) Call Spread; Najarian Owns (CELG); Najarian Owns (GOOG) Calls; Najarian Owns (JEF) Calls; Najarian Owns (KGC) Calls; Najarian Owns (PFE); Najarian Owns (PG) Calls; Najarian Owns (YHOO) Call Spread; Najarian Owns (XOM) Call Spread; Finerman's Firm Is Short (IJR), (IWM), (MDY); Finerman's Firm Is Long S&P Puts; Finerman Owns (AAPL); Finerman's Firm Owns (BAC), (BAC) Leap; Finerman Owns (BAC), (BAC) Preferred; Finerman Owns (GOOG); Finerman's Firm And Finerman Own (JPM); Finerman's Firm Owns (MCD); Finerman's Firm And Finerman Own (RIG), (RIG) Calls; Finerman's Firm Owns (YUM); Finerman's Firm Owns (GLW); Najarian Owns (XOM) Call Spread; Stutland Owns (GLD) Using Bull Option Spreads; Kelly Owns (FXE) Puts; Kelly Owns (AUY) Calls

For Anthony Scaramucci
Scaramucci Owns (AAPL), Skybridge Owns (AAPL); Scaramucci Owns (BAC), Skybridge Owns (BAC); Scaramucci Owns (C), Skybridge Owns (C); Scaramucci Owns (GOOG), Skybridge Owns (GOOG); Scaramucci Owns (GS), Skybridge Owns (GS); Scaramucci Owns (HPQ), Skybridge Owns (HPQ); Scaramucci Owns (INTC), Skybridge Owns (INTC); Scaramucci Owns (JPM), Skybridge Owns (JPM); Scaramucci Owns (MCD), Skybridge Owns (MCD); Scaramucci Owns (VIA.B), Skybridge Owns (VIA.B); Scaramucci Is Long U.S. Dollar, Skybridge Is Long U.S. Dollar; Scaramucci Owns (MRK), Skybridge Owns (MRK)

For Maynard Um
UBS AG, Affiliates Or Subsidiaries Own 1% Or More Of (AAPL)
(DELL), (HPQ), (MOT) Is Or In Past 12 Months Has Been An Investment
Banking Client Of UBS Securities LLC
(AAPL), (DELL), (MOT) Is Or In Past 12 Months Has Been A Client Of UBS Securities LLC (Non-Securities Services)
UBS Securities LLC Has Received Compensation From (AAPL), (DELL), (HPQ), (MOT) In Past 12 Months

For Brian Stutland
Stutland Equities Is A VIX Market Maker, Has A Long Position, Is Short Volatility

For Brian Kelly
Kanundrum Capital Owns (AUY)
Kanundrum Capital Owns (GFI)
Kanundrum Capital Owns (TLT)
Kanundrum Capital Owns U.S. Dollar
Kanundrum Capital Is Short (DB)
Kanundrum Capital Is Short (BCS)
Kanundrum Capital Is Short Euro
Kanundrum Capital Is Short Yen
Kanundrum Capital Is Short Franc
Kanundrum Capital Is Short (CLF)
Kanundrum Capital Is Short (AA)

For Steve Grasso
Stuart Frankel And Its Partners Own (AMR)
Stuart Frankel And Its Partners Own (BAX)
Stuart Frankel And Its Partners Own (DYN)
Stuart Frankel And Its Partners Own (CUBA)
Stuart Frankel And Its Partners Own (DYN)
Stuart Frankel And Its Partners Own (GERN)
Stuart Frankel And Its Partners Own (HSPO)
Stuart Frankel And Its Partners Own (MERC)
Stuart Frankel And Its Partners Own (NWS.A)
Stuart Frankel And Its Partners Own (NYX)
Stuart Frankel And Its Partners Own (PALM)
Stuart Frankel And Its Partners Own (PDE)
Stuart Frankel And Its Partners Own (PFE)
Stuart Frankel And Its Partners Own (PRST)
Stuart Frankel And Its Partners Own (RDC)
Stuart Frankel And Its Partners Own (TLM)
Stuart Frankel And Its Partners Own (XRX)
Stuart Frankel And Its Partners Own (SDS)
Stuart Frankel And Its Partners Are Short (QQQQ)
Stuart Frankel And Its Partners Are Short (CL)
Stuart Frankel And Its Partners Are Short (AAPL)


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