Microsoft Leads Tech Rally, But Is it Done?

Thursday, 1 Nov 2012 | 5:41 PM ET

Microsoft led a tech rally Thursday, but does the sector have room to run?

Drakon Capital's Guy Adami wasn't a buyer. "My inclination is to fade this move," he said on "Fast Money."

Microsoft: Gaining Momentum?
Microsoft is up more than 3 percent in the past 2 days, and the Fast Money traders strategize a play on the stock; and Shawn Matthews, Cantor Fitzgerald, discusses how top firms are coping after Sandy shut the markets down for 2 days.

But Microsoft was another story. "I think Microsoft is diversified enough," Adami said. "You're not going to get buried on the downside."

Enis Taner of RiskReversal.com said the tech sector market was seeing "a big rotation trade."

"I think the most encouraging aspect of what's happened in the market over the last week is the fact that we lost the leaders — Google, Apple and Amazon — but in their place we've seen Intel, Microsoft. We saw the industrials very strong today, so we've seen rotation that hasn't hurt the market even as the leaders have gotten hit, which is a really positive sign."

Simon Baker of Baker Avenue Asset Management backed the idea of shifting gears, saying he was moving out of consumer staples and into cyclical stocks.

Microsoft, he said, had potential following the release of Windows 8.

"The feedback is really positive. They got 400,000 users," he said, adding that "1.5 million people a day are upgrading."

Karen Finerman of Metropolitan Capital Advisors said it was "surprising" that retail, which stood to take a beating from Hurricane Sandy, emerged relatively unscathed and remained strong.

Trader disclosure: On Nov. 1, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long MSFT; Guy Adami is long NUE; Guy Adami is long BTU; Guy Adami is long AGU; Guy Adami's wife works at Merck; Karen Finerman is long AAPL; Karen Finerman is long BAC; Karen Finerman is long BAC call spreads; Karen Finerman is long JPM; Karen Finerman is long JPM calls; Karen Finerman is long WMT; Karen Finerman is long TGT; Karen Finerman is long MSFT; Karen Finerman is long GOOG; Karen Finerman is long M; Karen Finerman is long CMI; Karen Finerman is long SPY; Karen Finerman is long IWM; Karen Finerman is long DY; Enis Taner is long GS; Enis Taner is long AMZN puts; Enis Taner is long UHP calls; Enis Taner is short CMI call spreads; Simon Baker is long AAPL; Simon Baker is long WFC; Simon Baker is long MSFT; Simon Baker is long AMZN.

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