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Adami Spots A Trade In Housing

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Tuesday’s housing data indicated the homebuilding market will likely continue to deteriorate. But for investors who feel compelled to invest in the grim sector, there are some isolated trading opportunities, Guy Adami said on CNBC's "Closing Bell."

The homebuilders will likely turn before the housing market bottoms, Adami said. While they aren’t there yet as a group, he picked Hovnanian as a stock that could turn higher before the rest.

Hovnanian’s price action has been a “disaster,” according to Adami, there’s a huge (72%) short interest and the company is laden with debt problems. But the stock is so depressed that it’s getting toward levels where “interesting things may start to happen,” he said. It wouldn't be surprising if HOV rallied $3 on any day - a huge percentage move given the current stock price.



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Trader disclosure: On Nov. 20, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (YHOO), (EMC); Najarian Owns (AMTD) Options; (GOOG) Options; (YHOO) Options; Finerman's Firm And Finerman Own (GS), (KFT); Finerman's Firm Owns (SKS), (TSO), (WMT), (LTD), (CROX); Finerman's Firm Owns (MSFT) Options; Finerman's Firm Is Short (SPY), (IWM), (IYR), (IJR), (MDY), (LEN); Finerman's Firm Is Short (LEH) And Owns (LEH) Puts; Finerman's Firm Owns (HD) And (HD) Puts, Finerman Owns (HD); Finerman's Firm Owns S&P 500 Puts; Finerman's Firm Owns Russell 2000 Puts