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Halftime: Forget Back to Mac, ‘This’ Is Catalyst That Moves Apple

Given the buzz surrounding the improvements to Apple's Mac software that CEO Steve Jobs unveiled Wednesday, investors may be drawn to the stock.

But when trading Apple , the announcement of the latest "iLife" software suite doesn't matter, said the "Fast Money" traders. Technicals do.

If you're long, you have to trade the technicals, said Joe Terranova of Virtus Investment Partners. He recommends putting the stop at $291.

Steve Cortes, founder of Veracruz, agreed that Apple is "trading very technically at this point." Cortes noted that the stock is testing Tuesday's high of $314. Tuesday's low was $300, where "a ton of volume came in." He thinks a breakout in either direction has legs.

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UNUSUAL ACTIVITY: PAN AMERICAN SILVER

Renown options trader Jon Najarian spotted some "unusual activity" in silver producer Pan American Silver Wednesday.

"A lot of puts and I mean a lot," said Najarian, co-founder of optionMONSTER.com. "Like four times the open interest has changed hands in November, the front month contract for Pan American ."

People became concerned when both gold and silver prices fell sharply Tuesday, Najarian explained. Both precious metals bounced back Wednesday and he thinks gold could still climb higher, but investors are still on edge. With the sudden drop in prices, many realized they've had a "tremendous run" and should try to set up a floor.

Najarian is not surprised to see the hedging.

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CALL OF THE DAY: VMWARE

VMware caught an upgrade from Cowen & Co. Wednesday, as the firm gave the software company an 'outperform' rating after a 7 percent sell off Tuesday.

The company's bookings number disappointed when it reported quarterly earnings results Monday. But Gregg Moskowitz, a Cowen & Co. analyst, was willing to overlook the bookings number and upgrade the stock.

The bookings number disappointed in spite of revenue and earnings per share upside, Moskowitz explained. This was due to what's known as "tough compares." In other words, looking at the second quarter, VMware's sequential deferred revenue was 8 percent. If you exclude fourth quarter periods, which tends to be the company's strongest, this was the highest deferred revenue growth it's shown since 2008.

Moskowitz thinks VMW is "very well positioned" for strong revenue growth and sees 39 percent year over year bookings growth in the September quarter. The company is building out their portfolio and he thinks the Street is underestimating its margin expansion opportunity for 2011.

Given EMC's ownership in the company, Moskowitz doubts it's a potential takeover candidate. He wouldn't rule anything out, but he doesn't think there are any buyers for VMW.

Watch the video to see the full conversation with Gregg Moskowitz—it starts at :55.

What's the Trade?

Najarian thinks EMC could spin VMware off, but doesn't think it's likely. There just aren't enough players that would be able to do that, but maybe Cisco is one possibility.

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CALL TO THE FLOOR: RED HAT

James Whitehurst, CEO of Red Hat , said Wednesday his cloud computing company is "absolutely in the market" for mergers and acquisitions.

Whitehurst told the "Fast Money" desk that his company generates up to $400 million of free cash flow a year and has a lot of cash on the balance sheets. He said they could use that to make acquisitions, but declined to say what companies he's looking at.

Watch the video to see the full interview with Jim Whitehurst.

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CALL THE CLOSE

Despite sales, analysts are upbeat about Juniper Networks and the stock climbed Wednesday. Najarian likes the response and said the shorts are getting squeezed. He's a buyer.

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Terranova and Patty Edwards of Trutina Financial are buyers of the market.

"Incredible comeback in Morgan Stanley ," said Cortes. "If it finishes in the green, I want to buy."

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EMC
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JNPR
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MS
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PAA
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RHT
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VMW
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AAPL
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