Halftime Pt. 2: Apple, RIMM Approaching Technical Breakdowns?
Two technology titans are facing key tests on the charts Monday with Research In Motion on the the cusp of a new 52-week low and Apple approaching a key technical support at roughly $245 a share.
Jon Najarian, co-founder of optionMONSTER.com, likes Apple at $245. He recommends picking up the stock at current levels, which is $30 dollars from the highs.
On Monday, analyst firm Gleacher & Company said it expects an imminent margin boost for Apple because reception problems with its iPhone 4 will dissapate.
RESEARCH IN MOTION
RIMM's stock is broken down, said Tim Seymour of EmergingMoney.com.
Looking at fundamentals, Seymour thinks its Torch smartphone will prove to be a disappointment and said the company is not getting the international growth it needed to compete with Apple.
Overall, "the jury is still out" on RIMM, said Seymour, but he wonders how long the company's dominance in the business community will continue so long as its products are not innovative.
TRADING BURGER KING BEFORE EARNINGS TUESDAY
Fast food giant Burger King is scheduled to report quarterly earnings before the opening bell Tuesday. With shares of the Miami-based company having fared worse than its competitors, is BKC a buying opportunity?
"I think Burger King is a great brand," said Greg Badishkanian, an analyst with Citigroup, but recommended taking a wait-and-see approach right now. If the stock were to sell-off and some of its products were to gain momentum, he thinks it could be a "nice opportunity."
With increased prices for wheat and cattle, Badishkanian said rising commodity costs could be a major headwind in late 2010 and 2011. He said BKC does have longterm contracts, but less so than its competitors, like McDonald's . With Burger King, people are discounting the drive in traffic to the stores, so Badishkanian thinks it will be tough to pass costs onto consumers.
It would be "very hard" to get behind Burger King right now, said Steve Cortes of Veracruz. Shares of BKC are trading off of multi-year lows, while MCD is trading at all-time highs. Cortes said one of Burger King's problem is its demographic. They target young men, who are largely unemployed, he said. McDonald's, on the other hand, targets children.
CALL TO THE FLOOR: ENTERTAINMENT PROPERTIES TRUST
With diverse properties such as multiplex movie theatres, retail centers and several ski parks, Entertainment Properties Trust has become the top-performing equity real estate investment trust.
So what's ahead for this Kansas City, Mo.-based company? To find out, CEO David Brain joined us on Monday's 'Fast Money Halftime Report.'
Watch the video to see the full interview with Brain.
CALL THE CLOSE
Tim Seymour of EmergingMoney.com said the 1070 level in the S&P 500 is the level to hold.
"The market fells heavy," said Brian Kelly of Kanundrum Capital. "I think you can sell it."
"Apple and RIMM weaker, that means NASDAQ down, but S&P up," said Jon Najarian, co-founder of optionMONSTER.com.
Steve Cortes of Veracruz likes mining company BHP Billiton , which last week made an unsolicited $38 billion takeover bid for fertilizer producer Potash .
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Trader disclosure: On Aug 23, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Cortes owns (FCX), (SFD), (SPY); Cortes is long Corn; Cortes is short (BAC); Cortes is short (XLF); Cortes is short Japanese Yen; Cortes is short U.S. Treasuries; Seymour is long (POT; Jon Najarian owns (POT) and short call; Jon Najarian owns (VMW) and short call; Jon Najarian is long (DBA) put spreads
For Tim Seymour
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Accounts managed by Kanundrum Capital own U.S. Dollars
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Accounts managed by Kanundrum Capital own (ANDE)
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Accounts managed by Kanundrum Capital are short the U.K. Pound
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Within the past 12 months, Citigroup has acted as manager or co-manager of an offering of securities of (MCD)
Citigroup has received compensation for investment banking services provided within the past 12 months from (MCD)
Citigroup received compensation for products and services other than investment banking services from (BKC), (MCD) in the past 12 months.
Citigroup currently has, or had within the past 12 months, the following as investment banking client (MCD)
Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following as clients, and the services provided were non-investment-banking, securities-related: Burger King Holdings, Inc., McDonald's Corp, Hain Celestial Group Inc.
Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following as clients, and the services provided were non-investment-banking, non-securities-related: Burger King Holdings, Inc., McDonald's Corp
Analysts' compensation is determined based upon activities and services intended to benefit the investor clients of Citigroup Global Markets Inc. and its affiliates ("the Firm"). Like all Firm employees, analysts receive compensation that is impacted by overall firm profitability which includes investment banking revenues.
The Firm is a market maker in the publicly traded equity securities of Hain Celestial Group Inc, United Natural Foods Inc, Whole Foods Market Inc.