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Halftime: Is Tech Broken?

Tuesday, 17 May 2011 | 1:38 PM ET

Technology stocks have lagged the market since late last year. But does that mean tech is broken as a sector? For answers we turned to the charts.

The Technology Select Sector SPRD , an exchange-traded fund that tracks tech, saw its relative performance peak in the fourth quarter of last year, said Jeff deGraaf of Renaissance Macro Research. Based on his models, the XLK has been underweight since the beginning of the year. At this point, the only larger underweight is financials, he added.

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"Broken in the meantime? Yes. Forever? Probably not," deGraaf said of the tech space. "The upside trends positive, but certainly on a relative basis you're better off indexing on the S&P than you are owning tech right here."

For those "looking to own the best of the worst," deGraaf likes the semiconductors. Relative performance for the semis peaked in February. The semis have recently made a run, but it now appears as though they are waning.

"Even though on a relative basis they are holding up better, they still act and look tired to us," deGraaf said of semis.

Charting Tech Stocks
CNBC's Kate Kelly reports on AIG shareholders' expectations from CEO, Robert Benmosche. Also, charting tech stocks with Jeff DeGraff, Renaissance Macro Research.

A CNBC contributor, deGraaf has repeatedly been ranked by Institutional Investor magazine as the #1 technical analyst. WATCH THE VIDEO TO SEE HIS TECHNICAL ANALYSIS OF THE XLF.

Joe Terranova of Virtus Investment Partners said he's avoided owning technology stocks over the past eight weeks. He has, however, owned Apple shares from time to time. Given its massive balance sheet, he thinks Apple is a defensive tech stock. Still, he doesn't owning tech stocks until the latter part of 2011.

Veracruz founder Steve Cortes has long noted that Apple's stock has been lagging. As much as people love the company fundamentally, he said they just aren't buying its stock.

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DELL'S EARNINGS PREVIEW

Dell's Earnings Preview
CNBC's Herb Greenberg reports on Chinese ADR, Longtop Financial which stopped trading today, and Jayson Noland, Robert W. Baird with a preview of Dell's earnings.

Jayson Noland of Robert W. Baird previews of Dell's earnings.

To see the full segment, watch the video.

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Trader disclosure: On May 17, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Terranova Owns (OXY); Terranova Owns (XOM); Terranova Owns (KSS); Terranova Owns (BJ); Terranova Owns (DIS); Terranova Owns (TM); Terranova Owns (MCD); Terranova Owns (PEP); Terranova Owns (PFE); Terranova Owns (BAX); Terranova Owns (V); Terranova Owns (JPM); Terranova Owns (VRTS); Cortes Owns (SO); Cortes Owns (EXC); Cortes Owns (KFT); Cortes Owns (K); Cortes Owns (GS); Cortes Owns (MS); Cortes Owns (TGT); Cortes Is Short Nikkei; Cortes Is Short (EEM), Is Long S&P; Stutland Owns (GLD); Stutland Is Short (GOOG) Put Spread, Is Long (GOOG) Call; Stutland Owns (SLV) Put Spreads, Is Short (SLV) Calls, Owns (SLV); Stutland's Firm Makes Markets In SPX Options, Holds Hedged e-Mini And Options Position; Stutland's Firm Makes Markets In VIX Option And Holds Hedged VIX Futures And Options Position; Stutland Is Long Australian Foreign Debt Held In Australian Dollars

For 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 (NRCI)
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 (XLF)
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 DOMINO'S PIZZA UK & URL PLC
Virtus Investment Partners Owns More Than 1% Of (DRYS)

For Brian Kelly
Accounts Managed By Brian Kelly Capital Are Long Australian Dollar
Accounts Managed By Brian Kelly Capital Own (TLT) Calls
Accounts Managed By Brian Kelly Capital Own (AGO)
Accounts Managed By Brian Kelly Capital Own (NLY)
Accounts Managed By Brian Kelly Capital Own (EBAY)
Accounts Managed By Brian Kelly Capital Own (SLV) Calls
Accounts Managed By Brian Kelly Capital Are Short Yen

For Jayson Noland
Robert W. Baird & Co. And/Or Affiliates Expect To Recieve/Seek Investment Banking Compensation From (HPQ), (DELL) In Next 3 Months
Robert W. Baird & Co. Is A Market Maker In (HPQ), (DELL)

For Jeff Degraaf
***No Disclosures

CNBC.com with wires.

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