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Fast Money 360: Radio Shack

Tuesday, 27 Jul 2010 | 5:46 PM ET

Considering shares of Radio Shack are down about 10% over the past 3 months, how should you game this stock ahead of earnings, Thursday?

Seems like a good time for Fast Money 360.

Find out what fundamentals, technicals and insights from the options world all suggest lie ahead for this stock.

Fast Money 360: RadioShack
A check on the retailer set to report this week.

FUNDAMENTALS

Michael Pachter of Webush is bearish. “I think Radio Shack's overvalued,” he tells the desk candidly.

Although headline numbers may appear robust due to strong cellphone sales he says what lies beneath is troubling. “The fact is, every other category is declining.”

As if that’s not bearish enough he doesn’t like RadioShack as a takeover play either. Although Best Buy had been a rumored buyer, Pachter thinks that’s a lot of Street chatter, nothing more.

What’s the bottom line?

”I would be selling the stock now,” he concludes.

CHARTS

Carter Worth of Oppenheimer is also bearish.

Patterns in the chart suggest “it's stuck near $20 and starting to take on a rollover cast,” he explains, “the moving average is starting to flatten.”

Worth also pulls no punches. ”We're sellers of Radio Shack going into earnings,” he concludes.

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OPTIONS

Jon Najarian of OptionMonster tells the desk options action suggests the stock could move over 10% in the wake of earnings.

And it’s probably not to the upside. “I don’t think they’re going to outperform and I don’t think somebody’s going to buy them,” he says.

However Najarian thinks there are better places to play. “I’m staying away,” he concludes.


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Trader disclosure: On July 27, 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), (BTU), (NUE), (C), (GS), (INTC), (MSFT); Adami’s wife works at Merck; Grasso owns (ASTM), (ABK), (BAC), (BA), (BGP), (C), (CSCO), (DYN), (JPM), (LPX), (MO), (NDAQ), (PFE), (PRST); Kelly owns (BP) puts; Jon Najarian owns (AAPL) call spreads; Jon Najarian is long and short (BIIB) calls; Jon Najarian is long and short (MSFT) calls; Jon Najarian owns (SNDK) and is short calls; Terranova owns (AMZN), (EMC), (CREE), (BRCM), (LRCX), (COP), (AXP), (BMO), (CSX), (PEP), (CVS), (GS), (PCP), (C), (APA), (FCX), (JOYG), (MMM), (MOS), (UAUA), (WYNN), (GOOG), (BBY), (SU), (KOL), (XBI), (SWN), (BAX), (JNPR); Terranova is short (GLD)

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Scott Nations
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