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Halftime Report: Technicals Suggest Market Over-Exuberant

Bulls pushed the Dow higher on Thursday after Ben Bernanke maintained his extended period stance on interest rates adding fuel to the on-going rally.

However technical analysis suggests the market may be over-exuberant.

What must you know?

I’m concerned by the activity in the CBOE put call ratio, explains Todd Gordon of Forex.com. It’s about .60 and fast approaching the technically important .58 level.

That .58 level was last seen just before the January slide. I think the markets are way too over-exuberant especially with the lack of volume, says Gordon.

I agree the technical action is concerng but we’ve been seeing similar signs since last June, adds Jeff Tomasulo of SMB. And if you traded on those technicals you would have missed huge gains.

The trend is your friend until it isn’t, Tomasulo adds. I’m sticking with the trend and buying.

You can’t fight city hall, you can’t fight mother nature and you can’t fight the tape, adds Guy Adami.

I’m long the market at this point, says Patty Edwards. But I’m more interested in individual names. I think there are a lot of cheap stocks out there. Take a look at Best Buy.

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BANK STOCKS CHARGE HIGHER

Financials led the S&P 500's advance on Thursday, with shares of Citigroup popping after published reports said the Treasury may unveil a plan next month for the sale of its stake in the big bank.

What the bank trade?

Volume in Citi is very big, explains Jeff Tomasulo, but I’d stay away from this stock. I’m not a believer. If you want a bank play stocks I’d play the leaders such as Goldman Sachs, JP Morgan or BofA .

Charts suggest to me that JPMorgan could move to the upside with $45 being support, muses Todd Gordon. But with the yield curve flattening out I’m not sure how long financials can keep these gains going.

In financials I’m watching Bank of America, says Guy Adami. I think that’s the place to play. However it's worth noting that many financials are closing in on their 52-week highs which they made back in October, adds Adami. If we can’t get above and close above those highs I’d be concerned.

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BIG MONEY: AMAZON

The Fast Money traders are watching the action in Amazon , which appears to be breaking out with volume already at 90% of its 10-day average.

What’s the trade?

If I were long Amazon I’d be taking profits, says Guy Adami.

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CONSUMER BACK AND ALIVE?

Chatter on Wall Street suggests that the consumer is back after Best Buy reported stronger than expected sales of computers and TV.

What’s the trade?

Patterns in the charts suggest to me if Best Buy can hold and close above $45 it’s a buy, says Todd Gordon. Otherwise, I’m cautious.

But the fundamentals are strong, counters Patty Edwards. I'm bullish.

I agree with Patty, I think the stock looks cheap, adds Guy Adami.

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TOPPING THE TAPE: QCOM

Shares of Qualcomm popped on Thursday after the wireless chip maker raised its sales and earnings forecasts for the second quarter.

The company, citing stronger than expected sales from its chipset and licensing businesses, forecast quarterly earnings to run between 56 cents and 58 cents a share, excluding items.

What’s the trade?

If you’re long this name I’d take profits, counsels Jeff Tomasulo.

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TAKE YOUR POSITION: ORACLE

With Oracle reporting earnings after the bell, how should you be positioned?

I think the stock is a buy ahead of the release, says Patty Edwards. I think business spending is picking up.

Patterns in the charts suggest to me the stock has $2 to the upside, says Todd Gordon.

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CALL THE CLOSE:

Guy Adami: You can’t fight city hall, you can’t fight mother nature and you can’t fight the tape.

Jeff Tomasulo: The trend is your friend until it isn’t. I’m sticking with the trend and buying.

Todd Gordon: I’m short the market via the forex market by being short Australia's dollar and the euro.

Patty Edwards: I’d pick up Best Buy.


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Trader disclosure: On March 25th, 2010, 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), (C), (GS), (INTC), (MSFT), (NUE), (BTU), (C); Kaminsky Owns (LULU) Puts; Terranova Is Short (GS), (CAL), (UAUA); Terranova Owns (QCOM); Terranova Owns (GLD) April Puts; Terranova Is Short May Crude Oil Futures; Seymour Owns (AAPL), (BAC), (MGM); Gordon Is Short Australian Dollar vs. Yen and U.S. Dollar; Tomasulo Owns (AMZN), (GS), (MSFT), (QCOM), (FCX), (XOM), (CAT), (MCD), (IBM); Tomasulo Is Long Gold Futures; Edwards Owns (UUP)

For Tim Seymour
Seygem Asset Management Owns (MTL)

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 (EXR)
Virtus Investment Partners Owns More Than 1% Of (GOK)
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 (XLP)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLV)
Virtus Investment Partners Owns More Than 1% Of (XLI)

For Patty Edwards
Edwards Owns (AAPL) For Clients
Edwards Owns (AMZN) For Clients
Edwards Owns (AKAM) For Clients
Edwards Owns (BAC) For Clients
Edwards Owns (DELL) For Clients
Edwards Owns (GOOG) For Clients
Edwards Owns (GS) For Clients
Edwards Owns (JPM) For Clients
Edwards Owns (MCD) For Clients
Edwards Owns (MS) For Clients
Edwards Owns (RIMM) For Clients
Edwards Owns (WFC) For Clients
Edwards Owns (WMT) For Clients
Edwards Owns (SPY) For Clients
Edwards Owns (QQQQ) For Clients
Edwards Owns (GLD) For Clients
Edwards Owns (JCG) For Clients
Edwards Owns (INTC) For Clients
Edwards Owns (MSFT) For Clients
Edwards Owns (WFC) For Clients
Edwards Owns (SPY) For Clients
Edwards Owns (QQQQ) For Clients
Edwards Owns (GLD) For Clients

For Mike Khouw
Cantor Fitzgerald & Co. Is A Market Maker In (AMAT)

For Anthony Scaramucci
Skybridge Owns (APL)


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