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Trade Strategies as Stocks Struggle Near Key S&P Levels

On Tuesday, investors were trying to get a handle on the pullback in the market, after the S&P 500 retreated from the 1350 - 1360 level, an area that has generated strong technical resistance.

Considering the S&P 500 is currently trading near a seven-month high, and up more than 25 percent from a low in early October, the market may well be at an inflection point.

How should you position?

Instant Insights with the Fast Money traders

Joe Terranova says on a day when most stocks are in the red, is a good time to check out what’s green. “Look for what’s moving higher,” he says. “Hewlett Packard looks interesting to me right here.”

Trader Simon Baker suggests using the pullback to reload on momentum trades. “It’s a momentum market and the danger is to not participate,” he says, “but have strategies in place just in case.”

Trader Stephen Weiss thinks the pause in the market is a sign that the environment is transitioning away from momentum and toward individual names.

If you’re looking for a long trade, he says “Play with quality names – like JPMorgan – multiples are still dirt cheap.” And if you’re a nimble trader, he suggests short positions in BTU and MT . “The fundamentals don’t support the move in these stocks.”

Trader Zach Karabell thinks investors should be opportunistic. “I suggesting going into areas of the market that you think have been beaten down," he says.

If you're looking for an idea, Karabell tells us that he likes playing the growing global demand for water with Xylem and/or the water ETF CGW . "These plays have potential tailwinds winds long-term," he says.

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Trader disclosure: On Feb. 14, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Terranova is long VRTS; Terranova is long LQD; Terranova is long SWN; Terranova is long CSCO; Terranova is long TBT; Terranova is long SBUX; Terranova is long FXE; Terranova is long OXY; Terranova is long MCD; Terranova is long JOY; Terranova is long AXP; Terranova is long EMC; Terranova is long IBM; Terranova is long UNG puts; Terranova is long short AAPL put spreads; Baker is long AAPL; Baker is long JPM; Baker is long AMZN; Baker is long RL; Weiss is long QCOM; Weiss is long BRCM; Weiss is long WLP; Weiss is long HK; Weiss is long EUO; Weiss is long CSC; Weiss is long MOS; Weiss is long NS; Weiss is long ETP; Weiss is short AAPL puts; Weiss is short AMZN puts; Weiss is long MT; Weiss is long BTU; Weiss is long MDRX;

For Dan Dicker
Dicker owns UPL

For Willie Williams
No disclosure

For Ken Sena
No disclosures

For David Gober
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For Dennis Gartman
Gartman is long S&P 500 futures
Gartman is long gold
Gartman is short Euro

For Peter Misek
I, Peter Misek, CFA, CPA, certify that all of the views expressed in this research report accurately reflect my personal views about the subject security(ies) and subject company(ies). I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this research report.



CNBC.com with wires.

Symbol
Price
 
Change
%Change
S&P 500
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BTU
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CGW
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HPQ
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JPM MLP ETN
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MT
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XYL
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