GO
Loading...

Halftime: Facebook Venture to Drive Baidu Even Higher?

Stocks traded around break even Monday, as the Street braced for earnings season, which kicks off after the bell with results from Alcoa.

However, the Fast Money traders always focus on what’s working in the market and on Monday that was Baidu. Shares popped after word surfaced that technology and media titan Facebook had inked a deal with Baidu to launch a jointly owned social network in China.

According to reports published by our sister network MSNBC,the new venture would not involve Facebook.com, which is blocked inside China like many more social networking sites, but instead would be a new jointly owned website.

It's unclear when the site could launch: joint ventures need to be approved by the Chinese government

Nonetheless, the deal would give Facebook access to China’s giant and protected market. Considering shares of Baidu are up about 50% since January and 130% higher over the past 52-weeks, how should you trade it?

Will the potential of Facebook deal generate even more momentum for a stock that’s already benefited from strong tailwind?

Instant Insights with the Fast Money traders

According to Pete Najarian, at least some options investors expect the upward momentum in Baidu to continue. He’s spotted strong interest in the June 190 calls. That would be a jump of more 30%. “If you look at the outperformance of this stock versus Google. Baidu is up a lot while Google is unchanged," he says. But rather than Google playing a game of catch-up Najarian thinks the momentum continues in Baidu. "I think Baidu has legs to the upside,” he says.

Brian Kelly just can’t get behind Baidu. “For me, the chart on this thing looks like a hockey stick.” He doesn’t think chatter of a Facebook deal is any reason to get into Baidu at current levels. “If you like Baidu on fundamentals, fine but don’t use the Facebook story to get into it here.”

Trader Zach Karabell suggests gaming the space long Baidu, or long rivals such as Sina or NetEase . But he’s less interested in the Facebook deal than he is leveraging the exploding market in China. “Yes, they’re momentum trades but they’re momentum trades that are being bolstered buy incredibly strong fundamentals now and into the future.”

* Note: After the Halftime Report broadcast, Fast Money producers reached out to Facebook for comment. The company says they are "studying and learning" about China but dismissed the report, calling it rumor.

------------

SILVER VS GOLD

Again silver made gains, with the white metal hitting a new 31-year high on Monday.

What’s the trade?

Steve Grasso thinks silver will top out between $40-$45.

Zach Karabell largely agrees. "If silver moves too much too quickly I’d take gains," he says. "If we’re at $44 – $45 in 3 weeks I’d take my toys and play in another sand box."

Pete Najarian reminds the desk that call volume in the SLV has been on fire recently. "I can see a lot of profit taking, but I wonder what are the highs?"

------------

TOPPING THE TAPE: ALCOA

Aluminum giant Alcoa waffled around break even ahead of earnings Monday after the bell. What’s the trade?

What’s the trade?

Zack Karabell tells the desk he's modestly short.

Steve Grasso agrees with Karabell's short position. "I think above 18 was a gift."

Brian Kelly is not constructive but he also says, "the stock has momentum so I wouldn’t short it either."

------------

MARKET BUZZKILL: TECH DARLINGS

Tech darlings Apple and Netflix both took a hit in Monday's session.

How should you play tech?

Brian Kelly reminds the desk he's short the SMH. "My view on the short is 3-6 months," he says. "Chip companies have big inventories and potentially weak earnings."

Steve Grasso is watching Micron, which he says broke it’s 50-day at 11.03. He thinks the stock now trades down to 10.61.

------------

UNUSUAL ACTIVITY: PCS

Jon Najarian has spotted unusual options action in PCS .

A large volume of May 17 calls suggests the stock could have further upside, he says.




______________________________________________________
Got something to to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment, but not have it published on our Web site, send those e-mails to fastmoney@cnbc.com.

Trader disclosure: On April 11, 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 (PFE), (TCK), (AAPL), (AKAM), (C), (HK), (HPQ), (TEVA), (MS), (RSX), (GE). Pete Najarian is long (F) bonds. Pete Najarian is long (RIMM) calls. Pete Najarian is long (AVL) calls. Pete Najarian is long (EWZ) calls. Pete Najarian is long (HUN) calls. Pete Najarian is long (ICO) calls. Pete Najarian is long (MYL) calls. Pete Najarian is long (NTAP) calls. Pete Najarian is long (XLF) calls. Pete Najarian is long (PMCS) calls. Pete Najarian is long (BIG) calls. Pete Najarian is long (CVS) calls. Pete Najarian is long (XL) calls. Pete Najarian is long (WFT) calls. Pete Najarian is long (JOYG) calls. Pete Najarian is long (AXL) calls. Pete Najarian is long (BSX) calls. Pete Najarian is long (HBC) calls. Pete Najarian is long (STI) calls. Steve Grasso owns (AMD), (ASTM), (BA), (BAC), (C), (CPX), (CSCO), (D), (JPM), (LIT), (LPX), (MHY), (NDAQ), (PFE), (PRST). Zachary Karabell owns (AAPL), (GOOG) and (BHP). Zachary Karabell is long (AGQ) silver 2X ETF.

Comcast Is The Parent Company Of CNBC
Comcast Is The Parent Company Of NBCUniversal
GE Owns 49% Of NBCUniversal
GE Owns 49% Of CNBC

Steve Grasso
Stuart Frankel & Co and its partners own (CSCO)
Stuart Frankel & Co and its partners own (CUBA)
Stuart Frankel & Co and its partners own (GERN)
Stuart Frankel & Co and its partners own (HPQ)
Stuart Frankel & Co and its partners own (HSPO)
Stuart Frankel & Co and its partners own (MSFT)
Stuart Frankel & Co and its partners own (NYX)
Stuart Frankel & Co and its partners own (PFE)
Stuart Frankel & Co and its partners own (PRST)
Stuart Frankel & Co and its partners own (SDS)
Stuart Frankel & Co and its partners own (UAL)
Stuart Frankel & Co and its partners own (XRX)
Stuart Frankel & Co and its partners are short (QQQQ)
Stuart Frankel & Co and its partners are short (AAPL)

Zachary Karabell
River Twice Capital is short (AA)
River Twice Capital and Karabell own (GS)
River Twice Capital is long (KKR)
River Twice Capital and Karabell own (MON)
River Twice Capital is short (SPY)
River Twice Capital is short (QQQ)

Brian Kelly
Accounts Managed by Kanundrum Capital are long (TBT)
Accounts Managed by Kanundrum Capital are long (GLD)
Accounts Managed by Kanundrum Capital are long (SLV)
Accounts Managed by Kanundrum Capital are long (MON)
Accounts Managed by Kanundrum Capital are long (VLO)
Accounts Managed by Kanundrum Capital are long (EWP)
Accounts Managed by Kanundrum Capital are long (MCP)
Accounts Managed by Kanundrum Capital are long euro futures
Accounts Managed by Kanundrum Capital are long silver futures
Accounts Managed by Kanundrum Capital are long gold futures
Accounts Managed by Kanundrum Capital are long oil futures
Accounts Managed by Kanundrum Capital are long natural gas futures
Accounts Managed by Kanundrum Capital are long wheat futures
Accounts Managed by Kanundrum Capital are long soybean futures
Accounts Managed by Kanundrum Capital are short (XLF)
Accounts Managed by Kanundrum Capital are short (SMH)
Accounts Managed by Kanundrum Capital are short (EWJ)
Accounts Managed by Kanundrum Capital are short treasury bond futures

Dennis Gartman
Funds Managed by Dennis GArtman are long Canadian Dollars
Funds Managed By Dennis Gartman are long crude
Funds Managed by Dennis Gartman are long nat gas
Funds Managed by Dennis Gartman are shot 10 yr canadian bonds
Funds Managed by Dennis Gartman are shorrt 10 yr U.S. treas. notes
Funds Managed by Dennis GArtman are short euros.

Chris Motroni
**No Disclosures




CNBC.com with wires.

Symbol
Price
 
Change
%Change
S&P 500
---
AA
---
BIDU
---
MU
---
NFLX
---
NTES
---
TMUS
---
SINA
---
SLV
---
AAPL
---
MV SEMI
---

Contact Halftime Report

  • Showtimes

    Halftime Report - Weekdays 12p ET
    Fast Money - Weekdays 5p ET