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Pro Traders: These 3 Destroyed Names Were Oversold

Friday, 25 Feb 2011 | 5:56 PM ET

Despite a positive day on Friday, by the close the S&P had lost 1.7% for the week, breaking a three-week streak of gains.

As you likely know, fear that unrest in Libya could spread across the Middle East was largely behind the sell-off; more specifically investors worried about a spike in the price of oil and the wide ranging ripple it could unleash.

However, in many cases investors sold first and asked questions later throwing the proverbial baby out with the bath water.

In fact the Fast Money traders says 3 names were destroyed this week and are now oversold. They follow:

Fedex

Higher oil is never good for transportation names but Tim Seymour thinks investors may have over-reacted when they sold FedEx.

“I don’t think the stock is terribly expensive and everything we’ve gotten out of the company has been reasonably bullish. It was sold off on a panic,” he explains. “I don’t think it goes to new highs but I do think it has 10%.”

Eastman Chemical

With petroleum the raw material for many chemical products Guy Adami says it's no surprise that Eastman Chemical “got whacked when oil made a big run.”

However, this is another case where investors may have run scared. He says the stock made an all-time high about a week ago around $97.31 and then pulled back about 10%. “If oil has made its high for the short term, EMN is a name I’d look at next week,” he says.

Corning

Going downstream a tad, higher prices at the pump suggest consumers have less money in their wallets for other purchases; especially discretionary purchases such as gadgets. But Karen Finerman thinks any pullback in glass-maker Corning is a buying opportunity. “It got hit a lot this week and I bought it a few times,” she says.

Finerman likes this stock as a play on tablets; “you don’t even need to pick a tablet they’re going to be in a lot of tablets. And the balance sheet has excess cash,” she says. What’s the bottom line? “The stock is very cheap,” Finerman says.

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TECH STRENGTH – INTEL

The Nasdaq came back strong on Friday, with the chip stocks seeing some of the biggest gains.

Word on the Street
The Fast Money traders take a look at today's top business stories.

What’s the trade?

"With Morgan Stanley estimating that Apple could sell 100 million iPhones and 40 million iPads in 2011, it's no wonder chips are exploding," says Jon Najarian. "I’d play it long National Semi."

Brian Kelly is more inclined to play the cloud names. "The data center buildout is a way for companies to save money," he says. "Look at Emulex and QLogic .

Guy Adami is bullish Qualcomm. "I think you can buy at these levels with the understanding that it could slip in the short-term."

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TRADING THE GLOBE: GM

The autos were some of the biggest losers this week with GM breaking below its IPO price of $33 before bouncing back.

What’s the trade?

Tim Seymour says he’s a buyer of weakness and not just in GM. He also likes the pullback in Toyota and Tata .

Karen Finerman is also bullish; however she likes Daimler and BMW.

Zach Karabell suggests going downstream. "Look at parts maker Johnson Control," he says.

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TAKE YOUR POSITION: MARKET IN JOBS REPORT’S HANDS

QE2 Debate
The bond market is still seeing a fear bid amidst QE2 tapering off, with Jeff Kilburg, TreasuryCurve senior development director.

With the jobs number in focus and further signs of improving economic conditions, will we see an early end to QE2?

Get the latest from Jeff Kilburg of Treasury Curve. Watch the video now!






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Trader disclosure: On Feb 25, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Seymour owns (AAPL); Seymour owns (BAC); Seymour owns (F); Seymour owns (GE); Seymour owns (GM); Seymour owns (PBR); Seymour's firm owns (TTM); Seymour's firm is short (SU); Karabell owns (AAPL); Karabell owns (C); Karabell owns (FCX); Karabell owns (GE); Karabell owns (GOOG); Karabell owns (FXI); Karabell owns (RIMM); 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); Finerman's Firm Is Short (IWM); Finerman's Firm Is Short (SPY); Finerman's Firm Is Short (MDY); Finerman's firm is short (XRT); Finerman's firm is short (IJR); Finerman's Firm Is Long S&P Puts; Finerman's Firm Is Long Russell 2000 Puts; Finerman's Firm And Finerman Own (AAPL); Finerman's Firm Owns (BAC) Leap, Finerman Owns (BAC); Finerman's Firm Owns (BBY); Finerman's Firm And Finerman Own (BP); Finerman owns (C); Finerman Owns (GOOG); Finerman's Firm And Finerman Own (HPQ); Finerman's Firm Owns (IBM); Finerman's Firm Owns (JPM), (JPM) Leap; Finerman Owns (JPM); Finerman's Firm And Finerman Own (MSFT); Finerman's Firm Owns (WMT)

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

For Brian Kelly
Accounts Managed By Kanundrum Capital Own (FCX)
Accounts Managed By Kanundrum Capital Own Corn
Accounts Managed By Kanundrum Capital Own Wheat
Accounts Managed By Kanundrum Capital Own U.S. T-Bonds
Accounts Managed By Kanundrum Capital Own (IAU)
Accounts Managed By Kanundrum Capital Own (RDC)
Accounts Managed By Kanundrum Capital Own (FCX)

For Zachary Karabell
River Twice Capital Owns (VSEA)
River Twice Capital is short (SPY)
River Twice Capital is short (QQQQ)
River Twice Capital is short (SMH)
River Twice Capital is short (XLK)
Karabell and River Twice Capital Own (BRCM)
Karabell and River Twice Capital Own (CSCO)
Karabell and River Twice Capital Own (GS)
Karabell and River Twice Capital Own (IBM)
Karabell and River Twice Capital Own (PBR)
Karabell and River Twice Capital Own (POT)

For Anthony Scaramucci
SkyBridge Capital is a fund of funds manager. Funds held may or may not own the recommended securities.

For Jeff Kilburg
Kilburg has no disclosures


CNBC.com and wires

  Price   Change %Change
NASDAQ
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S&P 500
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BMW
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DAI
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ELUX.B
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GM
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JCI
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QCOM
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QLGC
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7203.T
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NATIONSTAR
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MV SEMI
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  • Melissa Lee is the host of CNBC's “Fast Money” and “Options Action.”

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  • Guy Adami is a contributor on CNBC's "Fast Money." He also is managing director of stockMONSTER.com.

  • Najarian, the "Pit Boss," is cofounder of optionMONSTER.com, a news site for options traders.

  • Finerman is president of Metropolitan Capital Advisors, Inc., a company she co-founded.

  • Founder of EmergingMoney.com

  • Chief Market Strategist for Virtus Investment Partners & CNBC Contributor

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