Buy JC Penney? Not Until Friday: Adami

After the bell on Tuesday, shares of JCPenney slipped more than 10% after the department stores latest results left bulls in tears.

Not only did JCPenney fail to meet the Street's already low expectations but it said same-store sales dropped 18.9 percent in the first quarter, more than the 12.2 percent decline expected by analysts, according to Thomson Reuters I/B/E/S.

Also, the company said it was discontinuing its 20-cent-per share quarterly dividend.

"The market did not expect the dividend cut. That is the big shock," says Brian Sozzi, chief equities analyst for NBG Productions.

By the numbers, Penney's reported a net loss of $163 million, or 75 cents a share, in the three months ended April 28 - below the penny loss on revenue of $3.45 billion Wall Street had expected and far below a profit of $64 million, or 28 cents a share, in the year-ago period.

The results suggest that customers were turned off by Penney's new plan to eliminate sales throughout the year in favor of everyday low pricing.

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The strategy, which was rolled out on Feb. 1, was intended to get people into the stores on a regular basis but instead it seems many customers have stopped shopping at Penney's entirely.

The Trade

“This may be a kitchen sink kind of quarter,” says pro trader Guy Adami. “And there's monster short interest in this stock. If we have a big volume day on Wednesday and the stock sells off big, by the end of the week I think JCP sets up for a long trade. But make no mistake, Adami is talking about a short term trade.

Karen Finerman is a long-term investor and she just can't get behind the stock, despite the relatively attractive valuations. “The results say to me that the turnaround strategy isn’t working,” she says. “Even down $4 in the after-market, I wouldn’t touch it.”

Joe Terranova thinks JCPenney’s pain is Target’s gain. "If Target pulls back, I’m a buyer," he says.

Posted by CNBC's Lee Brodie

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Trader disclosure: On May 15, 2012 , the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Tim Seymour is long BAC; Tim Seymour is long SBUX; Tim Seymour is long FCX; e Terranova is long VRTS; Joe Terranova is long MCD; Joe Terranova is long SBUX; Joe Terranova is long UPL; Joe Terranova is long LQD; Joe Terranova is long HPQ; Joe Terranova is long SNDK; Joe Terranova is long NFLX; Joe Terranova is long SJM; y Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long AGU; Guy Adami is long MSFT; Guy Adami is long NUE; Guy Adami is long BTU; Karen Finerman is short AAPL; Karen Finerman is long BAC; Karen Finerman is long JPM; Karen Finerman is long WMT; Karen Finerman is long TGT; Karen Finerman is long RIMM; Karen Finerman is long HPQ; Karen Finerman is long GRPN put spread; Karen Finerman is short SPY; Karen Finerman is short IWM; Karen Finerman is short MDX

For Jeff Klinefelter
Piper Jaffray usually provides bids and offers for the securities of J. C. Penney Company, Inc. and will, from time to time, buy and sell J. C. Penney Company, Inc. securities on a principal basis.

CNBC.com with wires.