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Halftime Pt. 1: 7 Tech Trades As Investors Scramble To Buy Sector

The Dow and S&P 500 gained Wednesday as investors pored over the record breaking profits and sales numbers just issued by Intel looking for insights into the broader technology sector and overall market.

With the S&P 500 index up about 8 percent from a recent intraday low on July 1, bullish investors have been scrutinizing Intel's earnings as well as other second-quarter earnings reports in an attempt to extrapolate trends and confirm their belief that the rally can be sustained.

How should you be positioned now?

Instant Insights with the Fast Money traders

I found Intel’s results wildly bullish for the whole PC space, says Joe Terranova. The Street can't ignore the fact that they just reported their best quarter ever.

Going forward I strongly believe tech climbs as portfolio managers position themselves across the sector broadly – it will be a rally that I don’t think they can afford to miss. I’d look at a swatch of new names including Qualcomm , Dell , Cree and EMC, he says.

I agree with Joe, echoes Zach Karabell. Personally, I’m watching semi names now, he adds. That’s an area that was so badly beaten up that these companies have become very well managed by necessity.

Intel results were so strong they have made me incrementally more positive, muses the usually bullish Brian Kelly. The aspect of Intel earnings that I thought was most impressive was their data storage growth. I’d play it long Emulex and Qlogic .

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THE INTEL FADE

With shares of Intel higher around lunchtime, investors are wondering if this quarter the stock breaks a trend.

According to data from Bespoke, since 2001 Intel has opened higher 21 times, but traded lower from open to close 16 of those times. The average open to close change is negative -1.58%.

That may be a tad easier to grasp from the chart below:

Intel - Since 2001
Opened Higher: 21 Times
Traded Lower From Open-Close: 16 Times
Avg. Open to close change: -1.58%
Source: Bespoke

What's the trade?

I'm among those investors who took profits, admits Jon Najarian. Earnings was the catalyst for Intel and now that catalyst is over.

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TAKE YOUR POSITION: GOOGLE

Google is the next tech titan scheduled to report earnings. The company releases results on Thursday.

How should you position?

I like Google near term. I expect it to trade to $500.

What do you think? We want to know!











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TOPPING THE TAPE: TRANSPORTS & SHIPPERS

Transports appear to be the big winners in Wednesday’s session on the heels of positive guidance from Expeditors - the company said it will beat second quarter expectations because of increases in both air and ocean freight volume.

What should you make of it?

I’m cautious, says Brian Kelly. I think it’s important to pick your names and spots in this space.

If you’re bullish the US economy, I’d play it with Fedex . If you’re bullish the global economy I’d play it with Expeditors , adds Zach Karabell.

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CALL OF THE DAY: GOLDMAN DOWNGRADES HOMEBUILDERS

The traders are closely watching the homebuilders after Goldman Sachs downgraded the sector to ‘Neutral’ from ‘Attractive’ citing the firm citing a lack of immediate catalysts that could help the sector's performance.

MDC Holdings was also removed from the conviction buy list.

What’s the trade?

I agree with Goldman’s call, says Jon Najarian. I don’t see much good in the sector until the late fall.

If you’re looking to play the homebuilders I’d consider going long when mortgages begin to tick higher, says Joe Terranova. That could trigger a flurry of buying.

I’d play the space short The St. Joe Company, a developer primarily concentrated in NorthWest Florida, says Brian Kelly.

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BP DELAYS TEST OF CONTAINMENT CAP

BP traded lower Wednesday after it said that delays have temporarily stopped work beneath the water on both a stopgap solution and a permanent fix to the gusher.

Read more about these developments. Click here for BP Says Relief Well on Hold for Test of New Cap


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Trader disclosure: On July 14, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Karabell Owns (FXI); Karabell Owns (GS), River Twice Capital Owns (GS); Karabell Owns (BP); Karabell Owns (CSCO), River Twice Capital Owns (CSCO); Karabell Owns (GOOG), River Twice Capital Owns (GOOG); Karabell Owns (C); Kelly Owns (BP) Puts; Kelly Is Short (GS); Jon Najarian Owns (QCOM), Is Short (QCOM) Calls; Jon Najarian Owns (MSFT), Is Short (MSFT) Calls; Jon Najarian Owns (GS), Is Short (GS) Calls; Terranova Owns (GOOG), (AMZN), (MON), (APC), (SUN), (FCX), (GMCR), (MYL), (MRVL), (BAC), (ADI), (ADBE), (AKAM), (HES), (ABT), (CVS), (AXP), (EMC)

For Zach Karabell
River Twice Capital Owns (MSFT)
River Twice Capital Is Short (QQQQ)
River Twice Capital Is Short (SPY)

For Briann Kelly
Accounts Managed By Kanundrum Capital Own (C)
Accounts Managed By Kanundrum Capital Own (BIG)
Accounts Managed By Kanundrum Capital Own (ELX)
Accounts Managed By Kanundrum Capital Own (QLGC)
Accounts Managed By Kanundrum Capital Own (GLD)
Accounts Managed By Kanundrum Capital Are Short (JOE)
Accounts Managed By Kanundrum Capital Are Short (FXI)
Accounts Managed By Kanundrum Capital Are Short (XLF)
Accounts Managed By Kanundrum Capital Are Short (XLI)
Accounts Managed By Kanundrum Capital Are Short (USO)

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 (CASS)
Virtus Investment Partners owns more than 1% of (LDR)
Virtus Investment Partners owns more than 1% of (LPHI)
Virtus Investment Partners owns more than 1% of (MGRC)
Virtus Investment Partners owns more than 1% of (XLB)
Virtus Investment Partners owns more than 1% of (XLP)
Virtus Investment Partners owns more than 1% of (XLY)
Virtus Investment Partners owns more than 1% of (XLI)
Virtus Investment Partners owns more than 1% of (XLK)
Virtus Investment Partners owns more than 1% of (XLU)
Virtus Investment Partners owns more than 1% of (SUBK)
Virtus Investment Partners owns more than 1% of (WDFC)
Virtus Investment Partners owns more than 1% of (YDNT)
Virtus Investment Partners owns more than 1% of (DRYS)


CNBC.com with wires

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BP.
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4331
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ELUX.B
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EMC
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EXPD
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FDX
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INTC
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JOE
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MDC
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QCOM
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QLGC
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SPDR SP HB
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GOOGL
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MV SEMI
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