Amid economic concerns, tech stocks gain favor

Tech companies led stocks substantially higher Wednesday morning, as markets opened in the green after a six-day losing streak.

The S&P 500 information technology sector was the biggest gainer, up almost 3 percent after the opening bell. Shares of Internet companies Netflix, Amazon and Google all bounced back more than 4 percent from the selloff.

And even though it's been a bumpy ride for some of these names, traders say investors are still depending on high-growth tech stocks in an environment where slow growth is becoming more and more concerning.

"On the rebound day it's the technologies, it's these Internet names that are starting to outperform," Andrew Burkly of Oppenheimer said Tuesday on CNBC's "Trading Nation."

Some tech companies including Netflix, Amazon and Apple saw a bounce Tuesday, as markets made a brief rally during the day before closing lower. Netflix shares have more than doubled this year, but traded through some wild swings in the past week's selloff, losing more than 20 percent before Tuesday.

"I think the underlying basis is that there's growth there," Burkly said. "We're seeing some of these names like Netflix, Amazon, Google, which are actually showing some pretty healthy growth and I think that's where investors are going to continue to gravitate toward."

Netflix is up almost 120 percent year to date. Amazon and Google are up 55 and 20 percent for the same time frame, respectively.

But technical analyst Rich Ross of Evercore ISI said that Netflix could still see more pullbacks, as the projected upside in the internet streaming company's trading range lands around $95. The stock opened up about 5 percent Wednesday to trade at $106.

However, he says he still thinks tech and Internet stocks are "fantastic places to be."

"The stock's sort of out ahead of its skis right now," Ross said. "But I still think investors are going to come back into stocks like Netflix."

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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