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Trading Best Buy Ahead of Earnings

Electronics retailer Best Buy will report its second-quarter earnings Tuesday, but is the stock a buy?

Amid struggling LCD TV and personal computer sales, the electronics retailer recently set-up an online marketplace to compete with Internet retailers, like Amazon.com . Some think the retailer had no other choice, but to go online, because more people were coming into the store and looking at items, only to later buy them on the Web.

As far as shorting Best Buy goes, that trade is over, trader Joe Terranova said. The $26 level was the bottom for this stock. He thinks it could go to $27 a share because the company's management team is better positioning it to compete with online retailers.

Tim Seymour of EmergingMarket.com would be careful with this stock. He thinks discount electronics retailers will be putting pressure on Best Buy and they could get hurt in the third-quarter.

Guy Adami of Drakon Capital would fade either move, whether it's to the downside or to the upside.

"If it's a disaster and they sell this thing off, I think you buy it for a trade," Adami explained. "If it's somehow surprisingly good, I think this stock is a longer-term short."


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Trader disclosure: On Sept. 12, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Jon Najarian owns call spreads in (ANF). Jon Najarian owns call spreads in (AAPL). Jon Najarian owns call spreads in (XOM). Jon Najarian owns (CIGX). Tim Seymour owns (AAPL), (BAC) and (INTC). Guy Adami owns (AGU), (C), (GS), (INTC), (MSFT), (NUE) and (BTU). Dan Nathan owns (AMZN) puts. Dan Nathan owns (AAPL) calls. Dan Nathan owns (BAC) puts. Dan Nathan owns (GS) calls. Dan Nathan owns (JPM) puts. Dan Nathan owns S&P 500 puts. Joe Terranova owns (XOM), (DIS), (WFM), (LULU), (MSFT), (TM), (JWN), (ORCL), (PEP), (MA), (BX), (GS), (DAR), (CAT), (VRTS), (AAPL), (CAT), (CVI), (IBM) and (FCX).

Joe Terranova
Terranova is Chief Market Strategist of Virtus Investment Partners, LTD
Terranova is Chief Market Strategist of Virtus Investment Partners, LTD
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CNBC.com with wires.