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Halftime: Financial Names Trading at Historically Low Levels

Financial stocks are now trading at historically low levels, including Bank of America , which drifted to a new 52-week low Thursday. BAC is now below both its 50- and 200-day moving average. Shares of the Charlotte, N.C.-based banks are down 16% over the last three months.

So is there opportunity in the troubled financial space?

There isn't much of an appetite to get into financial names, said Steve Grasso of Stuart Frankel. He praised Steve Cortes of Veracruz, who on Wednesday recommended shorting BAC and said if it hit $13 a share, there's not much that would stop it from dropping further. It seems that's what's happening with the stock, Grasso said.

In the broad market, Grasso recommends looking at the 1065 level in the S&P 500.

Jared Levy, an options trader, noted that Friday is an options expiration day, which usually means added liquidity and increased volatility, as well. But with most of the heavy traders on vacation, that's not necessarily happening. He recommends investors stick to technicals and likes the 1057 level as a loop bottom that he would buy.

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TRADING TECH STOCKS

Three tech leaders-turned-losers weighed on the NASDAQ Thursday: Intel investors frowned on the McAfee deal, HP shareholders seem far from reassured after Thursday's earnings call and Dell just can't catch a break.

What's causing these stocks to fall, said Pete Najarian, co-founder of optionMONSTER.com, is that there seems to be a bit of a slowdown. He thinks no one is buying HP because the company has been without a CEO since Mark Hurd departed two weeks ago. The question on investors minds is, who will take over? Analyst data on HP is due out in late September, but for now, Najarian thinks there are too many clouds to get into this stock.

No one is selling HP because Hurd left, argued Steve Grasso of Stuart Frankel. He said one of his partners got long the stock, hoping it would reach the $43 to $44 range.

Patty Edwards, principal at Storehouse Partners, owns HP. She said it was a blue chip company before Hurd came in and thinks the company will do fine in the future.

Shifting gears, Najarian said Dell's stock looks attractive, but thinks the company needs to do something to get investors interested. He suggests a dividend. Grasso agreed, adding that there's no reason for investors to jump into Dell right now.

Elsewhere in the tech space, Morgan Stanley downgraded Research In Motion by two notches, citing ongoing chaos over countries threatening to shutdown service and poor sales of its Torch smartphone, as well. The stock is down 10% for the week.

Stay away from RIMM, said Jared Levy, an options trader. Instead, he recommends looking at Google . The world today is producing a ton of information and whoever is able to process it is going to come out on top, he said.

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VALUE TRADES... OR TRAPS?

Crude. Industrials. Transports.

They're all global growth plays and have all been gutted after poor economic news this week. But before going bargain-hunting, you have to ask yourself: Are these value trades, or traps?

The industrials have been performing well and what we're hearing on their earnings calls sounds good, said Pete Najarian, co-founder of optionMONSTER.com. But these stocks are getting beat down by macroeconomic data, he noted. Najarian likes this space overall and recommends going with Caterpillar because he thinks its business story looks strong.

In the transport space, Storehouse Partners principal Patty Edwards like Alaska Air Group . The Seattle-based company is trading at seven-times-earnings, she said. It also has the load factor and client base.

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CALL TO THE FLOOR: EMERGENCY MEDICAL SERVICES

Can Emergency Medical Services be strong medicine for your portfolio?

On Friday's 'Fast Money Halftime Report', EMS CEO Bill Sanger spoke with CNBC's Melissa Lee. She said ER visits are up because people have little access to primary care doctors. If everyone has health care with the new reform laws, she asked if he expects the number of ER visits to decline. Sanger said ER visits went up because of a lack of providers, not because people were not health insurance or not.

Sanger said EMS has been profiting from cash-strapped hospitals, who are looking to save money through the services they offer.

What's the Trade?

Pete Najarian, co-founder of optionsMONSTER.com, has some concerns about this company because 30% of their revenues come from Medicare and Medicaid. Apart from that, he thinks the company is doing a great job of acquiring other companies.

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CALL THE CLOSE

"Stay hedged," said Patty Edwards, principal at Storehouse Partners.

Jared Levy, an options trader, is buying Consumer Staples Select Sector SPDR .

"Nibble," said Steve Grasso of Stuart Frankel.

Pete Najarian, co-founder of optionMONSTER.com, is also staying hedged.

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Trader discloures for Aug. 20, 2010:

PETE NAJARIAN
Pete Najarian owns (RIMM) calls
Pete Najarian owns (HPQ) calls
Pete Najarian owns (DD) calls
Pete Najarian owns (CNI) calls
Pete Najarian owns (AKAM) calls spreads

PATTY EDWARDS
Patty Edwards owns (PM)
Patty Edwards owns (PM) for clients
Patty Edwards owns (INTC) for clients
Patty Edwards owns (HPQ) for clients
Patty Edwards owns (XOM) for clients
Patty Edwards owns (COP) for clients
Patty Edwards owns (CVX) for clients
Patty Edwards owns (AKAM) for clients
Patty Edwards owns (GE) for clients
Patty Edwards owns (AA) for clients
Patty Edwards owns (ALK) for clients
Patty Edwards owns (LEG) for clients

JARED LEVY
Levy owns (GOOG) options

STEVE GRASSO
Grasso owns (ASTM)
Grasso owns (BA)
Grasso owns (BAC)
Grasso owns (C)
Grasso owns (CSCO)
Grasso owns (JPM)
Grasso owns (LPX)
Grasso owns (MO)
Grasso owns (MOT)
Grasso owns (NDAQ)
Grasso owns (PFE)
Grasso owns (PRST)

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 (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 (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)

CHRIS DANELY
JP Morgan has a investment banking relationship with (INTC)

Symbol
Price
 
Change
%Change
GOOGL
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ALK
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BAC
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4331
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HPQ
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INTC
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BB
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SPDR CS SEL
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