Is Citi’s Stress Test Sell-Off a Big Opportunity?

On Wednesday, traders were closely looking at the action in Citi, wondering if the pullback was an opportunity to pull the trigger.

Citigroup sold off sharply as one of 4 financials that failed the Fed’s recent stress test. However some traders including Fast Money’s Karen Finerman feel the criteria applied by regulators were somewhat draconian.

Take a look:
Unemployment Rate 13%
Equity Prices Dropping 50%
Housing Prices Dropping 21%
Other Major Economies of the world Contracting

The Fed's latest stress test tried to determine whether the banks have enough capital to withstand another financial crisis, but, if the environment were to become as bleak as what’s listed above, the entire stock market would decline – not just these banks, says Finerman.

Does that make the sell-off in Citi a buying opportunity? Money manager Jamie Cox of Harris Financial thinks it may.

“2-3 years from now you’ll be glad you own it,” he says. “If you’re looking in the short-run, I don’t think it’s a be all, end all. But in the long-run, Citi still has a lot of opportunity to generate revenue over time. $35 is still a pretty good level to own the stock if you can hold it over time.”

Trader Stephen Weiss just can’t get on board. “Why go there,” he says, “when JPMorgan is cheap and BofA is compelling.” And neither failed the stress test.

Trader Jeff Killburg can’t get behind bank stocks either. He thinks both the XLF and KBE – both look overbought.

Trader Patty Edwards doesn't love banks, either. “I’m not all that hot on the sector," she admits. The one stock that’s on my list is US Bank – but that’s if you put a gun to my head and said you must buy.”

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Trader disclosure: On March 14, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Weiss is long RAD; Weiss is long DMND; Weiss is long JPM; Weiss is long BAC; Weiss is long JCP; Weiss is long QCOM; Weiss is long HK; Weiss is long WLP; Weiss is long TBF; Weiss is long TBT; Weiss is short ANR; Weiss is short MT; Weiss is short FCX; Weiss is short AAPL Puts

For Patty Edwards
Edwards is long PM
Trutina Financial is long APPLE (AAPL)
Trutina Financial is long PGM
Trutina Financial is long SPDR Gold Trust (GLD)
Trutina Financial is long PM
Trutina Financial is long SBUX
Trutina Financial is long NKE

For Jon Najarian
No disclosures

For David Bank
No disclosures

For Michael Walkley
No disclosures

For Jamie Cox
Cox owns JPM, BAC
Harris Financial owns JPM, BAC, BB&T with wires.