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Halftime Pt. 2: Earnings Deluge Presents Flood Of Trading Opportunities

Prepare for a deluge of earnings reports next week. Some of the most widely followed companies will all release results - one after another. Take a look:

Monday: Alcoa
Tuesday: Intel, Yum!
Wednesday: Texas Instruments
Thursday: JPMorgan, Google
Friday: Bank of America, Citi, GE

Which reports can you trade? Here's what the Fast Money gang will be watching as well as how they're playing it!

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TAKE YOUR POSITION: ALCOA

Alcoa kicks off earnings season after the bell Monday; and is expected to turn a second-quarter profit after a year-ago loss, but analysts have recently been cutting their forecasts, and one sees the possibility of a return to red ink later this year.

Over the past three months, the price of aluminum has dropped sharply, from over $2,400 per ton in April to around $2,000 on Friday.

How should you be positioned?

Alcoa is out of favor with all my clients, says Steve Grasso. If we see a pop from earnings, I’d sell the strength.

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TAKE YOUR POSITION: BANKS


When Bank of America, JPMorgan , and Citigroup post their quarterly results next week, investors will focus on delinquencies and loan demand to see if the recent improvement in credit quality will last.

"Investors are very sensitive to a possible deterioration in credit, after what happened in 2008, 2009," says Marshall Front, chairman of investment firm Front Barnett Associates in Chicago.

Comments made on the conference calls with analysts could be crucial in setting the tone, says Anthony Polini, analyst at Raymond James. The executives could spook investors - by saying demand for loans is weak - or they could help shares bounce back with positive comments about credit line utilization picking up, for example, he says.

How should you position?


In the space I like BofA, says Joe Terranova. But it's because I expect their acquisition of Merrill will boost profits.

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TAKE YOUR POSITION: CSX

On the transports side, the traders think CSX will be the stock to watch with Pete Najarian already spotting some heavy activity in the name.

What’s the trade?

I’ve spotted a great deal of call buying ahead of CSX earnings, says Najarian. That suggest options investors are expecting a move higher.

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TAKE YOUR POSITION: YUM

Mark Kalinowski, an analyst at Janney Capital Markets rates Yum a "Buy," based mostly on the company's growth potential outside the United States.

He expects solid results from Pizza Hut but he expects revenue to slip at Taco Bell and possibly at KFC.

What’s the trade?

I like Yum!, says Patty Edwards. I find the story pretty interesting.

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FAST MONEY POLL OF THE DAY

What do you think? We want to know!















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Earnings may be a big part of next week's action, but they're not the only thing on Fast Money's radar. Here are some other catalysts worth watching:

UNUSUAL ACTIVITY: ALTR

Pete Najarian has spotted unusual options action in Altera .

An unusually largenumber of August 28 calls traded on Friday, he explains.

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TRADE TO GO: PHILIP MORRIS

Patty Edwards suggests putting Philip Morris on the radar.

They should benefit from a stronger euro and at 13 times, it’s attractive, she says.

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TOPPING THE TAPE: ANADARKO

Anadarko topped the tape Friday with the stock experiencing sharp gains; the move comes in the wake of word Anadarko management notified BP it will withhold reimbursement on cleanup costs.

What should you make of it?

If you’ve been riding Anadarko gains I’d take half off the table, counsels JoeTerranova I think there’s more upside, but the stock is up 26% over the past 5 days.

Citi has a buy rating on the stock and a target price of $75 a share, adds host Melissa Lee.

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CALL THE CLOSE:

Steve Grasso: I’m bullish tobacco and bearish on overall market.

Joe Terranova: I’d get long the laggards.

Patty Edwards: I’m on the sidelines watching carefully.

Pete Najarian: I think we stay flat.

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CALL TO THE FLOOR: CLOUD COMPUTING

With IT spending on an upswing, investors are looking at all the latest tech trends trying to determine which are most likely to attract a flood of new cash.

Should you put money behind cloud computing? Don’t make a move until you hear our interview with Lanham Napier president and CEO of Rackspace; a company that specializes in IT hosting and cloud computing.

Watch the video now!



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Trader disclosure: On July 9, 2010, 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 (CSX) Call Spread; Najarian Owns (ALTR) Call Spread; Najarian Owns (TCK); Najarian Owns (CNI); Najarian Owns (DD) Call Spread; Najarian Owns (AKAM) Call Spread; Najarian Owns (XLNX); Najarian Owns (CELG); Najarian Owns (TEVA); Najarian Owns (PFE; Terranova owns (GOOG),(AMZN),(MON),(APC),(GMCR),(MYL),(MRVL),(BAC) ,(ADI),(ADBE),(AKAM),(HES),(CVS),(AXP),(EMC),(ABT); Grasso owns (ASTM), (ABK), (BAC), (BGP), (C), (CSCO), (DYN), (JPM), (LPX), (MO), (NDAQ), (PFE), (PRST)

For Patty Edwards
Edwards Owns (SPY) For Clients
Edwards Owns (VXX) For Clients
Edwards Owns (QQQQ) For Clients
Edwards Owns (FCX) For Clients
Edwards Owns (GOOG) For Clients
Edwards Owns (AAPL) For Clients
Edwards Owns (YHOO) For Clients
Edwards Owns (MSFT) For Clients
Edwards Owns (V) For Clients
Edwards Owns (TXN) For Clients
Edwards Owns (JPM) For Clients
Edwards Owns (C) For Clients
Edwards Owns (BAC) For Clients
Edwards Owns (WFC) For Clients
Edwards Owns (MS) For Clients
Edwards Owns (GE) For Clients
Edwards Owns (CSX) For Clients
Edwards Owns S&P 500 For Clients
Edwards Owns Nasdaq 100 For Clients
Edwards Owns Gold For Clients
Edwards Owns Silver For Clients

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 (CASS)
Virtus Investment Partners owns more than 1% of (LDR)
Virtus Investment Partners owns more than 1% of (LPHI)
Virtus Investment Partners owns more than 1% of (MGRC)
Virtus Investment Partners owns more than 1% of (XLB)
Virtus Investment Partners owns more than 1% of (XLP)
Virtus Investment Partners owns more than 1% of (XLY)
Virtus Investment Partners owns more than 1% of (XLI)
Virtus Investment Partners owns more than 1% of (XLK)
Virtus Investment Partners owns more than 1% of (XLU)
Virtus Investment Partners owns more than 1% of (SUBK)
Virtus Investment Partners owns more than 1% of (WDFC)
Virtus Investment Partners owns more than 1% of (YDNT)
Virtus Investment Partners owns more than 1% of (DRYS)

For Steve Grasso
Stuart Frankel & Co and it’s partners own (BAX)
Stuart Frankel & Co and it’s partners own (COG)
Stuart Frankel & Co and it’s partners own (CUBA)
Stuart Frankel & Co and it’s partners own (DHR)
Stuart Frankel & Co and it’s partners own (DYN)
Stuart Frankel & Co and it’s partners own (GERN)
Stuart Frankel & Co and it’s partners own (HSPO)
Stuart Frankel & Co and it’s partners own (IP)
Stuart Frankel & Co and it’s partners own (MERC)
Stuart Frankel & Co and it’s partners own (NWS.A)
Stuart Frankel & Co and it’s partners own (NYX)
Stuart Frankel & Co and it’s partners own (PDE)
Stuart Frankel & Co and it’s partners own (PFE)
Stuart Frankel & Co and it’s partners own (PRST)
Stuart Frankel & Co and it’s partners own (RDC)
Stuart Frankel & Co and it’s partners own (SYMC)
Stuart Frankel & Co and it’s partners own (TBT)
Stuart Frankel & Co and it’s partners own (TLM)
Stuart Frankel & Co and it’s partners own (TRV)
Stuart Frankel & Co and it’s partners own (XRX)
Stuart Frankel & Co and it’s partners own (SDS)
Stuart Frankel & Co and it’s partners are short (QQQQ)
Stuart Frankel & Co and it’s partners are short (AAPL)

Late Additions:
Edwards Owns (PM)
Edwards Owns (PM) For Clients

CNBC.com with wires

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