On Wednesday investors bid Apple as high as $301.96 - an all-time record - in anticipation of a strong earnings report from the iPhone maker next week.
Adding to the momentum in this stock, investors are excited about an Oct. 20 media event for its Mac line of personal computers.
Apple promised a sneak peek at the next major version of the Mac operating system.
Meanwhile Intel - the world’s largest chip maker – cheered the Street with its strong outlook citing demand from emerging markets and corporations.
The action raised hopes that the technology sector could end 2010 on a strong note. However Fast Money trader Joe Terranova is concerned by the action in another tech stocks - and it's largely gone under the radar.
What must you know?
Instant Insights with the Fast Money traders
I was extremely surprised by earnings from Linear Technology which missed estimates when they reported earnings, says Joe Terranova. Linear makes circuits that touch a broad array of industries, so their results are concerning. We won't know if a tailwind is brewing in this space until we hear from Broadcom. That will tell us if the success of gadgets such as the iPad has long coat tails.
However, the fundamental story in Apple is extremely bullish into the holidays. But at these levels and with potential uncertainty I’d also buy downside puts for protection, Terranova says.
Looking at the Apple trade, if you want to be a little more aggressive, investors can sell out of some shares and buy puts, adds JJ Kinahan. I think you’ll get to buy Apple back a little lower.
The typical pattern for Apple is that it runs up into a product announcement and then sells off, reminds host Melissa Lee.
Elsewhere in the space, if you're looking for a chip play, I see a lot of investors playing SMH because Intel typically hits resistance around 20.5, adds Steve Grasso.
BROAD MARKET MOVES
The Dow and S&P both traded in the green on Wednesday largely due to a weaker dollar and rising expectations the Federal Reserve will move to prop up the economic recovery.
What should you expect from stocks?
I’m a surfer and I’d ride the wave higher, says Pete Najarian.
I see no reason to sell here, adds JJ Kinahan. Ride the wave higher.
Momentum tends to trump everything in this market, says Steve Grasso. I think the market is going higher but also buy put protection.
I’m actually looking for a pullback before I’d buy, admits Joe Terranova.
TAKE YOUR POSITION: GOOGLE
One of the most beloved stocks in the S&P – Google reports earnings on Thursday after the bell. How should you position?