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iOver?

Will Apple's earnings Tuesday reveal that momentum for Apple is iOver?

Brian Schaeffer, Managing Director at VDM Capital joins the panel for this conversation. Following is a summary of his main points.

In my opinion, Apple is a bad story from both a fundamental and technical perspective heading into earnings, says Schaeffer.

Fundamental story:

In the past, the company usually had some new product that would act as a catalyst for the stock and turbo charge earnings, explains Schaeffer. But that story is fading. The thin notebook is cool, but underwhelming. This quarter, I’m looking for margins to shrink, as the company has already cut prices for the iPhone and iPods and I’m also looking for a tepid forecast.

Technical story:

Technically, the stock does not look that good either, Schaeffer adds. The stock has pulled back some 20% since reaching a double top of $200. In addition, the stock is in danger of breaking through its long-term trend line, set from April of '07 until now. If it breaks through, I expect to see the stock trade significantly lower. I think investors will have a chance to buy Apple at $125, he concludes.

What do the Fast Money traders think?

I think Schaeffer is missing the big picture, says Pete Najarian. The iPhone and iPod and other devices are all about getting people into Apple stores to buy the Mac which has strong margins. I think Apple will knock the cover off the ball with their earnings.

I prefer Microsoft (MSFT), adds Jeff Macke. I expect them to say great things about their video games which have become a profit center. At $32 it’s probably a buy, he says.

I agree on Microsoft, adds Guy Adami.

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Trader disclosure: On Jan 18, 2008, 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 (INTC), (YHOO); Najarian Owns (BIIB), (C), (CSCO), (MS), (MSFT), (EMC); Najarian Owns (LEH) Puts; Finerman Owns (GS); Finerman's Firm And Finerman Own (HD); Finerman's Firm Owns (PLCE), (TSO), (VLO), (WMT), (YHOO), (M), (AEO) (DSW), (SUN), (SKS); Finerman's Firm Owns Russell 2000 Puts And Is Short (IWM); Finerman's Firm Owns S&P 500 Puts; Finerman's Firm Is Short (MDY), (IYR), (IJR), (SGP), (TCO),(SPY); Finerman's Firm Is short (LEH) And Owns (LEH) Puts; GE Is The Parent Company Of CNBC

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