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Halftime: Trading IBM Ahead of Earnings

IBM shares traded higher ahead of the technology company's quarterly earnings results, which it plans to report after the closing bell on Tuesday.

Patty Edwards, chief investment officer at Trutina Financial, said she plans to watch IBM's earnings more closely than she had watched Intel's last week.

"I think IBM is actually much more of a tech bellwether at this point," Edwards argued. "You're talking about services. You're talking about a company that is actually growing their business a lot strong than Intel is."

Jon Najarian, co-founder of optionMONSTER.com agreed with Edwards.

"The chart is something to behold," Najarian said of IBM.

"Especially when you're going back multi-years, to just see it progressing from the left-side to the right at that steady, almost 45 degree angle. Very impressive."

[See IBM's 5-year chart at left]

Should IBM report positive earnings results, that will read well for the rest of the tech space, Edwards explained. If IBM's earnings are strong, she would consider buying Salesforce.com , Oracle and Cisco .

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GOLDMAN SACHS: DON'T CHASE COAL RALLY

On Tuesday, Goldman Sachs told investors to avoid chasing the coal rally that has followed severe flooding in Australia. The price of $300 per metric ton for metallurgical coal is likely unsustainable, the New York City-based firm aruged. Goldman maintained its neutral rating on coal stocks, except Peabody Energy , which it gave a 'buy' rating because it's under performed its sector over the past month.

At this point, is the coal rally over?

Yes, said Brian Kelly, founder of Kanundrum Capital.

"You don't want to chase anything like this. The coal story in terms of the Australia problem is done," Kelly said. "The move's been made. I'd be selling."

While Kelly doesn't recommend playing coal in light of the Australian floods, he does think investors could go soft and grain commodities, like wheat and soybeans.

Joe Terranova, chief market strategist at Virtus Investment Partners, also agreed with Goldman's call. Natural gas prices, he said, should have appreciated as coal rallied. That never happened, so he's staying away from coal names.

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POPS & DROPS

Stocks were mixed Tuesday with the Dow advancing while the S&P and Nasdaq remained under pressure. By midday trading, the "Fast Money" desk found these market movers the most interesting:

Pops (stocks that went higher)

Boeing (BA) popped 3%: The jetliner maker said it will deliver the 787 in the third-quarter. The Chicago-based company has delayed release of the 787 for seven times now, said Terranova, only now the Street understands these things take time. Terranova said he likes BA and expects it will take out its 52-week high at $76 a share.

Yum! Brands (YUM) popped 2%: The restaurant chain operator is diversifying away from its A&W and Long John Silver's brands to concentrate on expanding in China, said Edwards. She thinks that makes sense.

Cinemark Holdings (CNK) popped 2%: Morgan Stanley upgraded the motion picture company to 'equal weight' from 'under weight' and increased its price target to $20 from $17. Kelly said he likes its chart, adding that if it stays at around this level in the next few days, investors could buy shares.

Drops (stocks that went lower)

NVIDIA dropped (NVDA) 3.81%: BMO Capital downgraded the technology company to 'market perform' from 'outperform,' citing shares are fully valued at current levels, said Najarian. He would stay away from NVDA right now.

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CALL THE CLOSE

As the "Fast Money Halftime Report" came to a close, the panel guessed where the market could go and revealed how they plan to play it.

Najarian blew off concerns over Apple CEO Steve Jobs taking another medical leave of absence.

"I love Steve Jobs and I love Apple here," he said.

Terranova is also bullish Apple.

Meanwhile, both Edwards and Kelly think the market could go higher.

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Trader disclosure: On Jan. 18, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Joe Terranova Owns (GLD) Puts. Joe Terranova Owns (FCX) Puts. Joe Terranova Owns (UPL). Joe Terranova Owns (VRTS). Joe Terranova Owns (PVH). Joe Terranova Owns (GM). Joe Terranova Owns (CVI). Joe Terranova Owns (CNQ). Joe Terranova Owns (LTD). Joe Terranova Owns (C). Joe Terranova Owns (PEP). Jon Najarian owns (BA), is short (BA) calls. Jon Najarian owns (DE), is short (DE) calls. Jon Najarian owns (GM), is short (GM) calls. Jon Najarian owns (F), is short (F) calls. Jon Najarian owns (CBOE), is short (CBOE) calls. Jon Najarian owns (CME), is short (CME) calls. Jon Najarian owns (GS), is short (GS) calls. Jon Najarian owns (JPM), is short (JPM) calls. Jon Najarian owns (MCD), is short (MCD) calls. Jon Najarian owns (WMT), is short (WMT) calls. Jon Najarian owns (RIMM), is short (RIMM) calls.

JOE TERRANOVA
Terranova is Chief Market Strategist of Virtus Investment Partners, LTD
Virtus Investment Partners Owns More Than 1% Of (ABAX)
Virtus Investment Partners Owns More Than 1% Of (AMKR)
Virtus Investment Partners Owns More Than 1% Of (CCG)
Virtus Investment Partners Owns More Than 1% Of (CASS)
Virtus Investment Partners Owns More Than 1% Of (CSVI)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (FCFS)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (KRC)
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 (NCRI)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLV)
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 (XLE)
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 (CLB)

PATTY EDWARDS
Edwards owns (SPY) for clients
Edwards owns (GLD) for clients
Edwards owns (SLV) for clients
Edwards owns (PGM) for clients
Edwards owns (BA) for clients
Edwards owns (AMZN) for clients
Edwards owns (F) for clients
Edwards owns (V) for clients
Edwards owns (JNJ) for clients
Edwards owns (AAPL) for clients
Edwards owns (GOOG) for clients
Edwards owns (VZ) for clients
Edwards owns (MSFT) for clients
Edwards owns (RIMM) for clients
Edwards owns (GS) for clients
Edwards owns (C) for clients
Edwards owns (GE) for clients
Edwards owns (MCD) for clients
Edwards owns (ALK) for clients
Edwards owns (TGT) for clients

BRIAN KELLY
Accounts Managed By Kanundrum Capital Own (GLD)
Accounts Managed By Kanundrum Capital Own (SLV)
Accounts Managed By Kanundrum Capital Own (FCX)
Accounts Managed By Kanundrum Capital Own (TAN)
Accounts Managed By Kanundrum Capital Own (IPI)
Accounts Managed By Kanundrum Capital Own (ANDE)
Accounts Managed By Kanundrum Capital Own (RKH)
Accounts Managed By Kanundrum Capital Own (YGE)
Accounts Managed By Kanundrum Capital Own (XLE)
Accounts Managed By Kanundrum Capital Own (MS)
Accounts Managed By Kanundrum Capital Own (LVS)
Accounts Managed By Kanundrum Capital Own (MON)
Accounts Managed By Kanundrum Capital Own (QLGC)
Accounts Managed By Kanundrum Capital Own (QCOM)
Accounts Managed By Kanundrum Capital Own (TBT)
Accounts Managed By Kanundrum Capital Are Long USD
Accounts Managed By Kanundrum Capital Are Short The Euro
Accounts Managed By Kanundrum Capital Are Short The Yen

SHAW WU
Kaufman Brothers is a market maker in (AAPL)
Kaufman Brothers is a market maker in (GOOG)

CNBC.com with wires.

Symbol
Price
 
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BTU
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CRM
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CSCO
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IBM
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INTC
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ORCL
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AAPL
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