The 'horse is out of the barn' with some beaten FANG stocks, but tech still looks good, says BTIG 

Fears of a widespread tech wreck have been greatly exaggerated, says BTIG's chief equity and derivatives strategist Julian Emanuel.

Even as Facebook, Twitter, Netflix and Intel were taken to the cleaners after recent earnings reports, Emanuel says one area of the market suggests the selling has reached its peak.

"The options market among other things is telling us that the fear is probably overdone at this point," Emanuel told CNBC's "Trading Nation" on Tuesday.

"Coming into earnings season, in the QQQ specifically, there was really an outsize bid to put protection, certainly relative to call protection," Emanuel said. "People were correctly anticipating the earnings reactions of a number of these names, which we got."

The FANG stocks — Facebook, Amazon, Netflix, and Google parent Alphabet — have seen some of the biggest postearnings moves. Facebook had a historic sell-off on Thursday, when it fell $119 billion in market cap in the biggest one-day loss for a single stock.

The volatility difference between puts and calls has decreased on the tech-heavy QQQ ETF since those big earnings events, says Emanuel. The broader index resisted a bigger drop in the face of high-profile tech sell-offs, a positive sign for the sector, he adds. Since Netflix reported on July 16, the XLK technology ETF has posted a nearly 2 percent decline.

"People were taking protection out in the index in general and the index really has barely budged," said Emanuel. "The underlying message is the horse is out of the barn with some of the FANG names in particular, but at the broader index level, technology still looks selectively attractive to us."

There could also be a divergence in some of the most popular tech stocks, he adds.

"There's a potential for bifurcation in the technology space," said Emanuel. "There are elements of FANG that are trading over 100 times next year's projected earnings and there are a number … trading below 25 and even 20 times earnings and, to us, that likely represents value at some point in here."

Apple, sometimes grouped in the expanded FAANG category, trades at below 15 times forward earnings. At the opposite end, Netflix trades at a 91 times multiple.

Even including recent tech sell-offs, the sector has been one of the best performers this year. The XLK is up 11 percent in 2018, double the gains on the S&P 500.

Emanuel and BTIG have a neutral weighting on technology. He is overweight financials and energy.

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