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Halftime: Mideast Aggression Getting Serious for Investors?

Stocks advanced on Wednesday after a flurry of deals revived chatter that despite the recent rally, stocks remained cheap.

However, a wild card may be emerging that could change everything.

With unrest spreading across the Middle East, Israel has begun to use a more aggressive tone in comments about Iran.

According to published reports, Iran plans to send two warships through the Suez Canal to Syria and in response Israel Foreign Minister Avigdor Lieberman has called the move "a provocation that proves Iran's nerve and self-esteem is growing from day to day".

Lieberman called on the international community "to understand that Israel cannot ignore these provocations forever".

And that left investors wondering -- with unrest erupting all around the region in recent weeks, are the relatively peaceful protests about to take a dangerous turn?

What must you know? How should you position now?

Instant Insights with the Fast Money traders

For a ‘tell’ Pete Najarian suggests keeping an eye on the Vix. “There’s not a big spike in the Vix,” right now he explains. “If it gets above 17 that’s concerning but we’re not seeing that right now.” That suggests that investors are not terribly nervous about these developments.

Strategic investor Dennis Gartman however in on the other side; he is concerned by these developments. "The fact that the commentary comes from the Israel's foreign minister makes it quite serious, he says." If you're looking for a trading idea, he thinks developments are supportive to oil and he's a buyer of any weakness.

Joe Terranova thinks geo-political tensions in the Middle East are bullish for Canada, which is also a major oil producing nation. He suggests long positions in two Calgary-based companies Suncor or Canadian Natural Resources. “Or go long the FXC – the Canadian dollar,” he says.

If you're looking to play the space, Pete Najarian suggests keeping an eye on oil services. He says options investors are “rolling up February upside OIH calls and rolling them into the March 170 calls.” Najarian also suggests looking at Halliburton and Diamond Offshore – names that he says "are really working."

JJ Kinahan suggests playing oil with some of the majors. "Exxon is a well run company," he reminds "also BP should benefit."

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NETFLIX

Elsewhere in the market, the traders suggest keeping an eye on Netflix after the LA Times said that Disney has quietly decided to hike its wholesale prices on new-release DVDs.

What’s the trade?

I’m not a Netflix fan but I wouldn’t go short because the momentum higher is still very strong, says Brian Kelly.

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DELL

Dell led tech higher after beating on EPS and revenue, and reporting a 16% jump in servers and networking sales.

What’s the trade?

Dell has been under- loved and under-owned and it wouldn’t surprise me to see the Street start to upgrade the stock, says Joe Terranova.

I have a tough time getting excited, counters JJ Kinahan.

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CALL OF THE DAY: RIM UPGRADED TO BUY FROM SELL

The desk has RIM on the radar after Citi Investment Research upgraded the BlackBerry maker to ‘Buy’ from ‘Sell’, saying it stands to benefit from rival Nokia’s new plan to embrace Microsoft's mobile operating system.

Nokia's change of strategy — the company is ditching its current smart phone software in favor of Windows Phone 7 — creates a multi-quarter gap in Nokia products and promotions by wireless carriers, analyst Jim Suva said in a note to investors.

Confused?

Fast Money host Melissa Lee explains: “The new Nokia / Microsoft phone won’t come out for many quarters,” she says.

“Carriers don’t won’t to spend money promoting a phone that’s going to be obsolete and they don’t want to promote a phone that won’t be on the market until the end of the year. That’s what creates opportunity for RIM.”

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Trader disclosure: On Feb. 16, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Pete Najarian owns (F) bonds and calls. Pete Najarian owns (GM), (YHOO), (MS), (C), (GE), (MU), (CNI) and (TCK). Pete Najarian owns (V) call spreads. Pete Najarian owns (JPM) call spreads. Pete Najarian owns (BAC) call spreads. Pete Najarian owns (NVDA) call spreads. Pete Najarian owns (CLF) call spreads. Joe Terranova Owns (VRTS), (C), (PEP), (UPL), (GM), (APA), (CVI), (SU) and (CNQ). Joe Terranova owns (CME) puts. JJ Kinahan is short SPY through options. JJ Kinahan is long (F) through stock and options. JJ Kinahan is long (CSCO) through stock and options. JJ Kinahan is long (YHOO) through options. JJ Kinahan is short (MSFT) puts. JJ Kinahan owns (C). JJ Kinahan owns (GE) through stock and options. JJ Kinahan is short (IWM) options.

Comcast is the parent company of CNBC
Comcast is the parent company of NBCUniversal
GE owns 49% of NBCUniversal
GE owns 49% of CNBC

BRIAN KELLY
Accounts Managed By Kanundrum Capital Own (IAU)
Accounts Managed By Kanundrum Capital Own (SLV), (SLV) calls, short (SLV) puts
Accounts Managed By Kanundrum Capital Own (INTC), (INTC) calls, short (INTC) puts
Accounts Managed By Kanundrum Capital Own (AMD)
Accounts Managed By Kanundrum Capital Own (MS)
Accounts Managed By Kanundrum Capital Own (JEF)
Accounts Managed By Kanundrum Capital Own (JJG)
Accounts Managed By Kanundrum Capital Own (DBA)
Accounts Managed By Kanundrum Capital Own (MON)
Accounts Managed By Kanundrum Capital Own (DRYS)
Accounts Managed By Kanundrum Capital Are Long USD
Accounts Managed By Kanundrum Capital Are Short The Yen
Accounts Managed By Kanundrum Capital Are Short The Australian Dollar

JOE TERRANOVA
Terranova is Chief Market Strategist of Virtus Investment Partners, LTD
Virtus Investment Partners Owns More Than 1% Of (ABAX)
Virtus Investment Partners Owns More Than 1% Of (AMKR)
Virtus Investment Partners Owns More Than 1% Of (CCG)
Virtus Investment Partners Owns More Than 1% Of (CASS)
Virtus Investment Partners Owns More Than 1% Of (CSVI)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (FCFS)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (KRC)
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 (NRCI)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLV)
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 (XLE)
Virtus Investment Partners Owns More Than 1% Of (XLF)
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 (DPUKF)

DENNIS GARTMAN
Funds Managed by Dennis Gartman are long the Canadian Dollar
Funds Managed by Dennis Gartman are long the Australian Dollar
Funds Managed by Dennis Gartman are long Gold
Funds Managed by Dennis Gartman are long Wheat
Funds Managed by Dennis Gartman are long Corn
Funds Managed by Dennis Gartman are long Soybeans
Funds Managed by Dennis Gartman are long Sugar
Funds Managed by Dennis Gartman are long Crude
Funds Managed by Dennis Gartman are long Nat Gas
Funds Managed by Dennis Gartman are short the Euro
Funds Managed by Dennis Gartman are short the Sterling
Funds Managed by Dennis Gartman are ahort The Yen




CNBC.com with wires.

Symbol
Price
 
Change
%Change
S&P 500
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BP.
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CNQ
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4331
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DIS
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DO
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FXC
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HAL
---
NFLX
---
BB
---
SU
---
VIX
---
XOM
---
MV OIL SVCS
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