Halftime: Trading Tech with NASDAQ Nearing 2007 Highs
With the NASDAQ 100 is slowly approaching its highest levels since December 2007, how should you trade tech now?
How about Apple ?
The index is being pushed higher by the technology giant, which accounts for 20 percent of the exchange. Shares of the Cupertino, Calif. company are down following a filing Wednesday, which reiterated that gross margins for the first quarter of 2011 won't meet analyst expetations.
Jon Najarian, an options trader and "Fast Money" contributer, would like to buy Apple's stock cheaper, but doesn't think he'll get a chance. Najarian thinks there are several short-term catalysts, which will help push the stock higher. He expects strong holiday sales of Apple's iPad, iPod and IPhone and thinks the release of the Verizon iPhone in 2011 will be another driver for the stock. If shares should drop down to $290, he would buy.
Taking the other side, Guy Adami of Drakon Capital said that Apple CEO Steve Jobs showing up on the earnings conference call back on Oct. 18 after the company issued its release was "interesting."
Adami noted that the company talked about lowering guidance on the call and then reiterated the message Wednesday. He thinks Apple is trying to tell the Street something, maybe lower expectations, but doesn't think they'll be any race to get out of the stock.
Lee noted that Apple is known for lowering expectations ahead of earnings, so that when they do report, they beat expectations.
CASINO HITS THE JACKPOT
Shares of Las Vegas Sands hit its highest level in nearly two years Thursday after reporting record revenues on strong sales at its Macau location.
This is a heavily shorted stock, so that's one reason we're seeing the spike in this stock, noted Adami. LVS has a "fantastic story" and "dominates the space," said Adami. The argument is that the stock may be overextended, but that's been the case for the last $15 or $20. If the stock trades down to the $41 level, he would buy it.
Najarian is in the name. He said investors could do a stock replacement strategy right now. In other words, you could trade out the stock and subsitute an in the money call. Because volatility is lower, you're not paying that premium anymore and he thinks this play could result in more upside with less risk.
Click here to see the traders' full conversation on Las Vegas Sands.
TRADING MICROSOFT AHEAD OF EARNINGS
Software giant Microsoft is set to report earnings after the closing bell Thursday. Speaking on the "Halftime Report," one analyst said now is the time to buy.
While some have knocked the PC refresh cycle, Walter Pritchard of Citigroup said it's being over-simplified. There is a consumer and a business side to it, he explained.
Some argue that Microsoft missed the boat on the smartphone and tablet areas, but Pritchard thinks they will eventually address those areas and again become a leader.
Watch the video to see the full conversation with Pritchard on Microsoft—it starts at 1:55.
What's the Trade?
Steve Cortes of Veracruz won't be a buyer of MSFT until it figures out what to do with all of that cash on its balance sheet.
CALL TO THE FLOOR: KINROSS
Demand from investors and jewlery will keep gold prices high, said Kinross CEO Tye Burt while speaking on the "Halftime Report."
The precious metal is getting harder to find and the long-term producer nations, like the US and Austrailia are in steep decline, he said. In turn, costs will climb and timelines will stretch out. With a weak US dollar causing gold prices to climb, Burt said he does monitor news about the possibility of quantitative easing. But he's concentrating on improving margins.
What's the Trade?
Cortes doesn't like this name because he doesn't think the dollar is as bad off as most say. He also thinks the company comes with risk because of some of its operating locations.
Najarian doesn't like that the market hasn't been able to push lower and is getting out of puts he's in.
Steve Grasso of Stuart Frankel said so much upside is priced into this market, he would sell the pops.
Adami is also a seller of the market.
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Trader disclosure: On Oct. 28, 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), (BTU), (NUE), (C), (GS), (INTC), (MSFT); Adami’s wife works at Merck Cortes owns (K), Cortes owns (TSN); Cortes is short crude oil; Cortes is short gold; Cortes is short (AAPL); Cortes is short (RSX); Cortes is short the U.K. Pound; Cortes owns the S&P 50; Grasso owns (ASTM), (BA), (BAC), (C), (CSCO), (JPM), (LPX), (MO), (MOT), (NDAQ), (PFE), (PRST); Jon Najarian owns (ABX) short stock; Jon Najarian owns (COP) short stock; Jon Najarian owns (FCX) short stock; Jon Najarian owns (LVS) short stock; Jon Najarian owns (MSFT) call spreads; Jon Najarian owns (RIMM ) call spreads; Jon Najarian owns (WMB) call spreads
For Steve Grasso:
Stuart Frankel & Co and it’s partners own (COG)
Stuart Frankel & Co and it’s partners own (CUBA)
Stuart Frankel & Co and it’s partners own (GERN)
Stuart Frankel & Co and it’s partners own (HSPO)
Stuart Frankel & Co and it’s partners own (MCD)
Stuart Frankel & Co and it’s partners own (MERC)
Stuart Frankel & Co and it’s partners own (MGM)
Stuart Frankel & Co and it’s partners own (NWS.A)
Stuart Frankel & Co and it’s partners own (NYX)
Stuart Frankel & Co and it’s partners own (OPEN)
Stuart Frankel & Co and it’s partners own (PDE)
Stuart Frankel & Co and it’s partners own (PFE)
Stuart Frankel & Co and it’s partners own (PRST)
Stuart Frankel & Co and it’s partners own (RDC)
Stuart Frankel & Co and it’s partners own (TLM)
Stuart Frankel & Co and it’s partners own (XRX)
Stuart Frankel & Co and it’s partners own (SDS)
Stuart Frankel & Co and it’s partners own (UAL)
Stuart Frankel & Co and it’s partners are short (QQQQ)
For Walter Pritchard
Citi makes a market in (MSFT)
Within the past 12 months, has acted as manager of an offering of securities of (MSFT)
Citigroup has received compensation for investment banking services from (MSFT) within the past 12 months
Citigroup received compensation for non-investment banking services from (MSFT) in the past 12 months
Citigroup has or had within the past 12 months (MSFT) as investment banking client
Citigroup has, or had within the past 12 months (MSFT) as a non-investment-banking client
Citigroup has, or had within the past 12 months (MSFT) as a non-investment-banking, non-securities-related client
CNBC.com with wires.