×

Not a Pro? Don’t Make This ‘Catastrophic’ Mistake: Adami

Banks stocks may have landed on your trader radar Monday, with some premiere franchises slipping down to tempting levels.

The sector dropped broadly after reports suggested new Basel III requirements could deal another blow to the beleaguered sector.

As investors went into ‘sell first and ask questions later’ mode, BofAGoldman Sachs and Wells Fargo all traded down to levels that could make you think about hitting the buy button.

But unless you’re have the aplomb of a pro and can move in and out of positions with ease, trader Guy Adami says now is not the time to buy.

If you’re a retail investor, “I’ve been saying every rally in bank stocks is to be sold,” Adami reminds. “That continues to be the case. If you’re buying financials on the dip as an investment you’re making a catastrophic mistake.”

He goes on to say the action in financials have been telegraphing weakness for quite some time and he continues to think the group will go even lower. And that includes stocks such as BofA, Wells Fargo and Goldman – names that often land on shopping lists.

“In the new year I can see BofA at $4.50, Goldman at $80 and Wells Fargo at $21.50,” Adami says. "There is nothing here that’s interesting."

And if you’re a money pro who must have exposure to bank stocks, Adami says look at USB . “That’s the only name I know that holds in there relatively well against its peers.”

But that's only if you must buy banks.


______________________________________________________
Got something to to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment, but not have it published on our Web site, send those e-mails to fastmoney@cnbc.com.


Trader disclosure: On Dec. 19, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Adami owns AGU; Adami owns MSFT; Adami owns NUE; Adami owns BTU; Adami owns C; Adami owns GS; Adami owns INTC; Grasso owns ASTM; Grasso owns AVAV; Grasso owns BA; Grasso owns D; Grasso owns LIT; Grasso owns MHY; Grasso owns PFE; Grasso owns PRST; Grasso owns S; Grasso owns XLU

For Steve Grasso
Stuart Frankel & Co and its partners own
Stuart Frankel & Co and its partners own ABX
Stuart Frankel & Co and its partners own APC
Stuart Frankel & Co and its partners own CSCO
Stuart Frankel & Co and its partners own CUBA
Stuart Frankel & Co and its partners own DVN
Stuart Frankel & Co and its partners own GERN
Stuart Frankel & Co and its partners own GM
Stuart Frankel & Co and its partners own HPQ
Stuart Frankel & Co and its partners own HSP
Stuart Frankel & Co and its partners own HSPO
Stuart Frankel & Co and its partners own MSFT
Stuart Frankel & Co and its partners own MU
Stuart Frankel & Co and its partners own NEM
Stuart Frankel & Co and its partners own NYX
Stuart Frankel & Co and its partners own PRST
Stuart Frankel & Co and its partners own RDC
Stuart Frankel & Co and its partners own UAL
Stuart Frankel & Co and its partners own XRX

For Brian Kelly
Shelter Harbor Capital is short UBS
Shelter Harbor Capital is short CS

Gregory Badishkanian
Citigroup Global Markets Inc. or its affiliates beneficially owns 1% or more of any class of common equity securities of Polaris Industries, Carnival Corp.. This position reflects information available as of the prior business day.

Within the past 12 months, Citigroup Global Markets Inc. or its affiliates has acted as manager or co-manager of an offering of securities of Harley-Davidson Inc, Mattel Inc.

Citigroup Global Markets Inc. or its affiliates has received compensation for investment banking services provided within the past 12 months from Harley-Davidson Inc, Mattel Inc, Hasbro Inc, Carnival Corp.

Citigroup Global Markets Inc. or its affiliates expects to receive or intends to seek, within the next three months, compensation for investment banking services from Harley-Davidson Inc.

Citigroup Global Markets Inc. or an affiliate received compensation for products and services other than investment banking services from Harley-Davidson Inc, Polaris Industries, Mattel Inc, Hasbro Inc, Carnival Corp. in the past 12 months.

Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following as investment banking client(s): Harley-Davidson Inc, Mattel Inc, Hasbro Inc, Carnival Corp..

Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following as clients, and the services provided were non-investment-banking, securities-related: Hain Celestial Group Inc, Harley-Davidson Inc, Mattel Inc, Hasbro Inc, Carnival Corp..

Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following as clients, and the services provided were non-investment-banking, non-securities-related: Harley-Davidson Inc, Polaris Industries, Mattel Inc, Hasbro Inc, Carnival Corp..Analysts' compensation is determined based upon activities and services intended to benefit the investor clients of Citigroup Global Markets Inc. and its affiliates ("the Firm"). Like all Firm employees, analysts receive compensation that is impacted by overall firm profitability which includes investment banking revenues.

The Firm is a market maker in the publicly traded equity securities of Hain Celestial Group Inc, Whole Foods Market Inc, Mattel Inc, Hasbro Inc.

For Rajesh Ghai
ThinkEquity LLC makes a market in VMware, Inc., EMC Corporation and Microsoft Corporation securities; and/or associated persons may sell to or buy from customers on a principal basis.


For Peter Misek

Ticonderoga Securities LLC makes a market in JEF security. Ticonderoga Securities LLC, in its market making capacity, sells to or buys from customers the securities of this company on a principal basis.

For Rich Greenfield
No disclosures

Dan Dicker
No disclosures

Jeff Hirsch
No disclosures



CNBC.com with wires.