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Pro Traders: Should You Follow Kremlin into BP?

Friday, 14 Jan 2011 | 5:42 PM ET

Late Friday the energy complex landed center stage after news of a stock swap hit the Street.

According to published reports, Russia’s Rosneft will take a 5% stake in BP , and in exchange Rosneft will give BP about 9.5 percent of its shares.

Meanwhile, a source familiar with the matter told Reuters the planned deal would involve the two companies jointly exploring for oil and gas in Russia and other places.

What should you make of it? How should you trade?

Instant Insights with the Fast Money traders

Tim Seymour sees the move as more political than anything else. “It suggests to me that BP will look East and not West for oil. Having the Russian government on your side is how to do business in Russia.”

If you’re looking for a trade, Seymour thinks investors should sell the rip in BP." I don’t see any immediate benefit to the balance sheet from the deal,” he says.

Patty Edwards sees it a little differently. She says, “the deal makes BP slightly more attractive. With the economy starting to recover we’re going to need more energy.”

Karen Finerman would take a wait and see approach. “ I would not buy or sell on this news,” she admits.

Guy Adami thinks a better move might be watching the reaction of oil services stocks after Schlumberger reports in the week ahead. “I’d watch to see how the space reacts,” he says.

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GOLD BREAKS DOWN

The traders are keeping a close eye on gold after the precious metal broke key technical levels and finished at a 7-week low.

Gold for January delivery lost $26.50, or 1.9%, to end at $1,360.40 an ounce. This is the lowest settlement price since Nov. 22.

What should you make of it?

Many of the reasons to own gold seem to be going away, says Guy Adami. I would not be a buyer of dips.

If gold can’t rally on a day like Friday when we see signs of inflation it gives me pause, says Tim Seymour. But I wouldn’t be a seller, either.

If gold slides to $1300, I’m a buyer, says Brian Kelly. In the months ahead, I think India will buy gold because of inflation and use it as a hedge.

Is gold a commodity or a currency alternative, adds Karen Finerman. That’s what you have to ask yourself.

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MUNI-BOND SELL-OFF

Take a look at the sell off in the muni bond ETF.

Why is Gold Down?
What's behind gold's downward trend, with the Fast Money traders.

The MUB slid to its lowest level in over 2 years as cash strapped states have difficulty refinancing and investors flee.

What should you make of it?

Find out from Jon Najarian. Watch the video now!

* You can find our conversation with The Monster about 9 minutes into this video clip.



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Trader disclosure: On Jan. 14, 2011, 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); Adami Owns (C); Adami Owns (GS); Adami Owns (INTC); Adami Owns (MSFT); Adami Owns (NUE); Adami Owns (BTU); Adami's wife works for (MRK); Seymour owns (AAPL); Seymour owns (BAC); Seymour owns (F); Seymour owns (FXI); Seymour owns (POT; Finerman's firm is short (MDY); Finerman's firm is short (SPY); Finerman's firm is short (IWM); Finerman's firm is short (IJR); Finerman's firm is long S&P puts; Finerman's firm is long Russell 2000 puts; Finerman owns (AAPL); Finerman owns (BAC); Finerman's firm owns (BBY); Finerman owns (BP); Finerman's firm owns (BP); Finerman owns (C); Finerman's owns (GOOG); Finerman owns (HPQ); Finerman's firm owns (HPQ); Finerman's firm owns (IBM); Finerman owns (JPM) and (JPM) leaps; Finerman's firm owns (JPM) and (JPM) leaps; Finerman owns (MSFT); Finerman's firm owns (MSFT); Finerman owns (WFC) preferred; Finerman's firm owns (WMT)

BRIAN KELLY
Accounts Managed By Kanundrum Capital Own (DE)
Accounts Managed By Kanundrum Capital Own (FCX)
Accounts Managed By Kanundrum Capital Own (GLD)
Accounts Managed By Kanundrum Capital Own (MCP) puts
Accounts Managed By Kanundrum Capital Own (YGE)
Accounts Managed By Kanundrum Capital Own (TAN)
Accounts Managed By Kanundrum Capital Own (QLGC)
Accounts Managed By Kanundrum Capital Own USD
Accounts Managed By Kanundrum Capital Own (DNR)
Accounts Managed By Kanundrum Capital Own (TBT)
Accounts Managed By Kanundrum Capital Are Long The Australian Dollar
Accounts Managed By Kanundrum Capital Are Long The Hong Kong Dollar
Accounts Managed By Kanundrum Capital Are Short The Euro
Accounts Managed By Kanundrum Capital Are Short The Yen

PATTY EDWARDS
Edwards owns (AAPL) for clients
Edwards owns (AMZN) for clients
Edwards owns (C) for clients
Edwards owns (F) for clients
Edwards owns (GE) for clients
Edwards owns (GLD) for clients
Edwards owns (GOOG) for clients
Edwards owns (JNJ) for clients
Edwards owns (MSFT) for clients
Edwards owns (MUB) for clients
Edwards owns (ORCL) for clients
Edwards owns (POT) for clients
Edwards owns (TGT) for clients
Edwards owns (TTM) for clients
Edwards owns (VZ) for clients

JON NAJARIAN
Jon Najarian has no disclosures on (MUB)

TIM SEYMOUR SOT
Seymour had no disclosures for (TM) on 1/5/2011

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CNBC.com and wires

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BP.
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ISHARES SP NAFMBF
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SLB
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  • Founder of EmergingMoney.com

  • Chief Market Strategist for Virtus Investment Partners & CNBC Contributor

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