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Trading Apple, Alibaba on China's currency move

Apple shares tumbled on Tuesday amid renewed concerns about its China business, and one CNBC "Fast Money" trader believes the technology behemoth's struggles have just begun.

"I think the story in Apple is crumbling a little bit," said trader Brian Kelly, adding that investors may want to take profits.

China's surprise overnight move devalued the yuan by about 2 percent Tuesday. With the U.S. dollar growing stronger against the currency, Apple could face a tougher time selling its iPhone in the key market.

The Apple Store in Grand Central Station in New York City.
Mike Segar | Reuters
The Apple Store in Grand Central Station in New York City.

The stock fell more than 5 percent to about $113.50 per share. Kelly contended that Apple will face new challenges in an already "well saturated" smartphone market.

Read MoreAnalyst: There's concern about Apple, but...

But Apple's valuation—at about 13 times earnings—still gives it appeal, said trader Tim Seymour, who owns the stock. Trader Guy Adami added that a sustained drop to $105 per share would provide a strong entry point for a trade.

Alibaba

U.S.-listed shares of Chinese e-commerce giant Alibaba slid nearly 4 percent on Tuesday. The company reports quarterly results on Wednesday, before the market opens.

Seymour—who owns the stock—noted that the company's situation is "getting better." Alibaba shares have plunged more than 25 percent this year amid concerns like China's regulatory environment for Internet retail.

Read MoreHeadwinds for Alibaba ahead of earnings: Analysts

Adami noted that anything "remotely positive" for Alibaba would boost Yahoo shares. Yahoo's stock has moved almost in tandem with Alibaba ahead of the spinoff later this year of its Alibaba stake, which was worth about $30 billion last month.

Yahoo has plummeted nearly 29 percent this year.

Disclosures:

Tim Seymour

Tim Seymour is long AAPL, T, BAC, DIS, F, GE, GM, GOOGL, INTC, JPM, Tim's firm is long BABA, BIDU, MCD, NKE, NOK, SBUX, YHOO.

Brian Kelly

Brian Kelly is long BBRY, BTC=; ITB, TAN, TLT, TSL, the VIX, GDX call spread, TWTR call spread, US dollar; he is short AUDJPY, GBPJPY, DAX, Yuan and Yen.

Karen Finerman

Karen is long BABA, BAC, C, FINL, FL, GILD, GOOG, GOOGL, JPM, KORS, M, BABA puts, she is short SPY, Her firm is long ANTM, AAPL, BAC, C, DIS, FBT, FINL, FL, GOOG, GOOGL, GPS, IBB, JPM, KORS, M, SUNE, URI, XBI, KORS call spreads, SUNE call spreads, KORS puts, M puts, SUNE puts, her firm is short IWM, SPY, MDY, Karen Finerman is on the board of GrafTech International.

Guy Adami

Guy Adami is long CELG, EXAS, INTC, Guy Adami's wife, Linda Snow, works at Merck.