Halftime Report: Google Weakness Ominous For Tech?
The Fast Money traders are closely watching the action in Google after the stock broke its upper range – it's showing cracks, they say.
Could this be the canary in the coal mine for big cap tech stocks?
Instant Insights with the Fast Money traders
Google broke its upper range on Wednesday at $620, explains Scott Redler of T3. That gave the bears confidence to take profits and spread selling around big tech to names such as Amazon , Apple and other tech names investors wanted to own before Christmas.
Now I’m watching for support around $598 to $600. If that key level does not hold I think we could see more selling. And broad selling. Be careful of big tech, technically.
If Google does break below $600 we I agree that we could see some serious downward momentum in tech, adds Jeff Tomasulo of SMB. For Google, the 50-day is around $580. Not until Google gets to that level would I think about buying the dip and adding to my position.
I’m also looking for Google to go to $580, adds OptionMonster Jon Najarian. But I would add to my position at that level. And if you’re in Google now, I’d look at puts for some downside protection.
SEEKING OPPORTUNITY IN A SIDEWAYS TAPE
On Thursday the market was trading relatively unchanged as investors hit the pause button ahead of Friday’s jobs report.
On average, economists expect a loss of 8,000 non-farm jobs in December after a 11,000 job losses in November.
However, the bulls were a little spooked after data showed initial jobless claims edged higher last week.
So where can you make money in today's tape?
I’m watching the action in General Electric, says Jon Najarian. I think in the wake Goldman’s bullish note on 3M, investors are rotating out of other areas and into industrials. I have no position in GE, but if I were long I’d stay with it.
If you believe in global growth I think GE is a stock to own, says Scott Redler. And if you’re a trader in the short term I think it goes to $18.
Of if you want to play industrials broadly I’d do it with XLI , adds Joe Terranova.
Before you turn into a raging industrials bull, it’s worth noting that Citigroup says currency headwinds could prevent Alcoa from meeting the Street's forecasts when it kicks off earnings season next week.
Analyst Brian Yu says Alcoa is now "fairly valued" and cut the stock to "hold" from "buy."
What’s the trade?
If you think the dollar is going to rise significantly it’s a headwind for Alcoa and many multinationals, explains Joe Terranova. However, I do not think that’s going to be the case.
I’m on the same page as Joe, says Jeff Tomasulo. I don’t think we’re going to see major moves higher in the greenback.
Speaking of the dollar , the greenback hit a 4-month high against the yen on Thursday after Japan's new finance minister said he wanted it to weaken yen even more.
The dollar's rally against the yen helped boost the greenback against a basket of currencies across the board.
What must you know?
Earlier in the week Todd Gordon of Forex.com told the desk he expects to see additional dollar strength and would place bets accordingly.
TRADE TO GO: OIL
Joe Terranova says if you’ve been playing the Santa Claus rally in oil it’s time to move to the sidelines or even get short.
CALL THE CLOSE
Joe Terranova: I’d go stock specific.
Jon Najarian: I’m a seller.
Jeff Tomasulo: I’m a buyer.
Scott Redler: I’m a selective sector buyer.
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Trader disclosure: On January 7th, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Kaminsky Is Short (QQQQ); Finerman's Firm Owns (GME), (MSFT), (PLCE), (WMT); Finerman's Firm Is Short (IJR), (SPY), (IWM), (MDY), (UNG), (USO); Finerman's Firm Owns (WFC) Preferred; Finerman's Firm Owns (BAC) Preferred, (BAC), (BAC) Call Spread; Finerman Owns (BAC) Preferred, (BAC); Finerman's Firm And Finerman Own (GOOG); Finerman's Firm Owns (TJX); Finerman's Firm Is Short 30-Year Treasury Options; Finerman's Firm Is Short (TBT); Finerman Owns (AAPL); Terranova Owns (BAC); Terranova Is Short February Crude Oil Futures; Terranova Is Short (CMA), (SHLD); Terranova Is Long Copper Backwardation, Is Long May 2010 Futures, Is Short July 2010 Futures; Seygem Asset Management Owns (EEM) Puts, Seymour Owns (EEM), (AAPL), (AA), (BAC), (CHL), (FXI), (INTC)
Add’ls Disclosures for Joe Terranova
Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
Virtus Investment Partners Owns More Than 1% Of (CLB)
Virtus Investment Partners Owns More Than 1% Of (DLR)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (UA)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (SKT)
For Jon Najarian
Jon Najarian Owns (APOL) Time Spread
Pete Najarian Owned (XLF) Calls Today
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