RIM Gain ‘Good Sign’ for Broader Market: Pro
Research In Motion shares gained nearly 4 percent Thursday, leading options trader Brian Stutland to call it a positive indicator.
Shares of the Blackberry maker closed at $11.54 following a note from Goldman Sachs that said consensus for the next four quarters was too low.
"It certainly makes sense that RIM does go lower here," Stutland said, adding that traders were busy buying puts on $9 strike.
| Name | Price | Change | %Change | Volume | ||
|---|---|---|---|---|---|---|
| BB | --- |
But he saw a bright spot in the action.
"One thing actually that is kind of positive about the whole RIM story is when you get these stocks have been so beaten down, so hammered nobody wants to own them, and then they start to rally, it's at least a good sign for the broader market," he said. "It's a good sign for the market that money is being put to work in a beaten-up name."
Drakon Capital's Guy Adami pointed out that the stock saw a 50 percent retracement of its 52-week high.
(WATCH: Pros Face Off Over Research In Motion)
"It's effectively where we traded up to today and failed. The stock traded lower the rest of the day on huge volumes. I'm in the camp that this is probably headed lower again."
Steve Grasso of Stuart Frankel agreed with the idea that RIM's stock provided a tell.
(Read More: Watch Stock Market's 'Whipsaw Swings': Brown)
"As soon as you see this market turn around here, people rush to buy anything. You buy those beaten-up names, you buy those names to short-cover," he said. "Every rally starts with a short-covering rally. There's a little 'Trade School' for you."
Written by Bruno J. Navarro, CNBC.com Producer.
Trader disclosure: On Nov. 29, 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 AAPL; Tim Seymour is long INTC; Tim Seymour is long SBUX; Tim Seymour is long GOOG; Karen Finerman is long AAPL; Karen Finerman is long AAPL PUTS; Karen Finerman is long BAC; Karen Finerman is long BAC CALL SPREADS; Karen Finerman is long JPM; Karen Finerman is long JPM CALL SPREADS; Karen Finerman is long WMT; Karen Finerman is long TGT; Karen Finerman is long MSFT; Karen Finerman is long GOOG; Karen Finerman is long EBAY; Karen Finerman is long M; Karen Finerman is short SPY; Karen Finerman is short IWM; Karen Finerman is short MDY; Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long MSFT; Guy Adami is long AGU; Guy Adami is long NUE; Guy Adami is long BTU; Steve Grasso is long AET; Steve Grasso is long AKS; Steve Grasso is long ASTM; Steve Grasso is long AUO; Steve Grasso is long BA; Steve Grasso is long CLF; Steve Grasso is long F; Steve Grasso is long GDX; Steve Grasso is long GOOG; Steve Grasso is long LF; Steve Grasso is long LNG; Steve Grasso is long MHY; Steve Grasso is long MT; Steve Grasso is long P; Steve Grasso is long PXD; Steve Grasso is long NVIV; Steve Grasso is long PFE; Steve Grasso is long S; Steve Grasso is long WYNN; Steve Grasso is long X.
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