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It’s Time to Play Defense: Strategist

With weak fundamentals in the stock market, defensive sectors offer the best bets for investors, Gina Martin Adams of Wells Fargo said Thursday.

"I think there's no reason, really, to chase stocks here," she said. "We've been relatively cautious on the market all year because the fundamental case is quite weak. Earnings revision momentum has consistently been negative."

On CNBC's "Fast Money," Adams added that pricing has continued to move without technical supports.

"Pretty much a whole slew of indicators have turned over, suggesting that price trend is now at risk," she said.

Adams said that her top sectors were health care, consumer staples and utilities.

While she acknowledged that those sectors may appear overbought, Adams noted that health care, for example, was still trading at a secular low.

"It's trading at about 1 time the S&P 500 now, so you can't make that argument broadly across all defensive sectors," she said.

Utilities, she added, looked "a little bit expensive."

"But, quite frankly, as long as the 10-year Treasury bond is going to remain range-bound, or even rally as it has over the last several weeks, utilities looks relatively attractive," Adams also said.

For health care and consumer staples, she predicted EPS growth of about 5 percent.

"So there's a compelling earnings case for part of this story," Adams said. "It's not the broad story, but relative to a lot of other sectors in the market, these sectors are producing earnings growth. And that's worth paying for."

Trader disclosure: On April 18, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Josh Brown is long AAPL; Josh Brown is long JPM; Josh Brown is long WFC; Josh Brown is long XLU; Josh Brown is long TLT; Josh Brown is long TGT; Josh Brown is long EBAY; Josh Brown is long IEO; Jon Najarian is long FB PUTS; Jon Najarian is long VXX CALLS; Jon Najarian is long FXI PUTS; Jon Najarian is long FDO CALLS; Jon Najarian is long FDO; Jon Najarian is long TXN PUTS; Mike Murphy is long AAPL; Mike Murphy is long BAC; Mike Murphy is long UNH; Mike Murphy is long TOL; Mike Murphy is long IP; Stephanie Link is long AAPL; Stephanie Link is long GS; Stephanie Link is long CSCO; Stephanie Link is long IBM; Stephanie Link is long EMC; Stephanie Link is long MRK.

Symbol
Price
 
Change
%Change
DJIA
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HEALTH
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CONS STPL
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UTILITIES
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S&P 500
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US 10-YR
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