Not only did shares of Netflix fall sharply in midday trading Tuesday, Trutina Financial's Patty Edwards said it's breached several key technical levels.
The stock has moved through the 20-day moving average, noted Edwards. It's getting close to the 50-day moving average of $175 a share.
"The problem with stocks like this, that have been such high fliers, is that when they break, they break hard to the downside," noted Edwards. "Your first sale is usually your best sale."
Both Edwards and Joe Terranova of Virtus Investment Partners would avoid this stock right now. Terranova said he'd need to see a fundamental change before buying.
Jon Najarian, on the other hand, remains interested in Netflix. The optionMONSTER.com co-founder would buy shares if it were to fall through the $175 level.
UNUSUAL ACTIVITY: WHIRLPOOL
From the options market, Najarian said there's unusual activity in Whirlpool. He said the Jan. 90 call volume has spiked and volatility is up by 60 percent, where it would typically be at 30 percent.
It remains to be seen what's driving the sudden interest in the stock . If it's takeover speculation, Edwards isn't sure who'd be interested in acquiring appliance company.
POPS & DROPS
As stocks moved higher on stronger economic reports on Tuesday, here are the market movers that caught the traders' attention:
Pops (stocks that moved higher)
Amgen (AMGN) popped 3%: Shares of the biotechnology company rallied, as Piper Jaffray upgraded the stock to ‘overweight’ from ‘neutral.' Terranova likes amgen, but didn't say why.
Caterpillar (CAT) popped 2%: The industrial company is still riding the China wave, as its stock hit a new all-time high on Tuesday. Edwards said the global growth story is helping the stock.
Drops (stocks that fell)
Sanderson farms (SAFM) dropped 4%: The poultry producer reported that profit more than doubled in the fourth quarter. Feed costs have been higher than expected, though, said Kanundrum Capital's Brian Kelly. Sanderson is hedged a bit, but he isn't recommending this name right now. He'd rather buy the feed.
CALL THE CLOSE
Najarian expects the market to close higher.