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Traders make picks as retail signals recovery

The "Fast Money" traders weighed the retail stocks as the SPDR S&P Retail ETF has gained about 2.7 percent in the last month.

Some investors are breathing a sigh of relief as it seems like the sector might finally be rebounding.

Trader Pete Najarian said that the retail stocks are moving higher because they "didn't do as poorly as people expected" during earnings season. He said investors are also looking at retail companies because their valuations remain relatively low.

Trader Dan Nathan agreed and said to keep an eye on Wal-Mart, Home Depot and Costco for a breakout. He pointed out that all three of those stocks hit 52-week closing highs this month.

Trader Tim Seymour said he thinks "the long-term prospects for [Ralph Lauren] are good." The stock has gained 9 percent in the last month. He said, however, that retail stocks with a lot of short interest are still struggling with an "existentialist moment" in reworking their business models.

Trader Steve Grasso said Ulta looks attractive, as its shares have been on a tear this year, soaring 46 percent.

Disclosures:

TIM SEYMOUR

Tim Seymour is long APC, AVP, BAC, BBRY, CLF, DAL, DO, DVYE, EDC, EWZ, F, FB, FCX, FXI, GM, GOOGL, GRMN, GE, INTC, LQD, M, MCD, MPEL, NKE, RACE, RAI, RH, RL, SINA, T, TWTR, UA, VALE, VZ, XOM and short: SPY, XRT. His firm is long ABX, BABA, BIDU, CBD, CLF, EWZ, F, HD, KO, MCD, MPEL, NKE, PEP, PF, SAVE, SBUX, SINA, VALE, VIAB, WMT, WEN, YHOO and short HYG, IWM.

PETE NAJARIAN

Long stock: AAPL, BAC, BMY, DIS, DISCA, GE, KMI.A, KMI, KO, LUX, PEP, PFE, TGT, long calls: AAL, ABT, AKS, BAC, C, CIT, CNX, COP, CSCO, DISH, DVN, EGO, ETP, FSLR, FXI, GLD, GT, HALO, INTC, KGC, KMI, LLY, MT, MU, NEM, P, PG, SBUX, SLV, SLW, SYMC, TGT, TMUS, TWTR, UA, VRX, XLE puts: EEM, MBLY, MRO, XOM.

DAN NATHAN

Dan Nathan is long TWTR, IWM long Sept put, XLF long Aug put spread, long PYPL call calendar, long C Aug put spread, XOP Sept put spread, BAC long Sept put, long FEZ Nov put spread, long EEM put calendar, long FB.

STEVE GRASSO

Steve Grasso is long BA, CC, EVGN, KBH, MJNA, MU, OLN, PFE, PHM, T, TWTR, GDX Grasso's Kids Own EFA, EFG, EWJ, IJR, SPY. No shorts. Stuart Frankel & Co Inc. and some of its Partners have a financial interest in LDP, WDR, AVP, CVX, FCX, ICE, KDUS, KO, MAT, MCD, MJNA, NE, NEM, OLN, OXY, RIG, STAG, TAXI, TEX, TITXF, URI, VALE, WDR, WYNN, ZNGA, CUBA, HSPO, AMZN, MJNA, TITXF, NXTD, SPY, QQQ, DIA, XLI, BGCP, VIRT, JCP, GE, AIR, FP.