According to his chart, for the last 10 months there has been an “incredible divergence” between the semis and the rest of the sector.
In addition, he says semis have underperformed 30% relative to the rest of the tech sector. Could it be because semiconductors are, in many ways, commodities of their own right?
Whatever the reason for the divergence, Carter sees an opportunity to own the semis. With such huge runs in stocks like Apple and RIM, some profit taking is all but guaranteed, he says.
And it is often the case that when investors cash out of those names, the money is redeployed into the most laggard part of the sector – the semiconductor stocks.
Pete Najarian agrees with the premise, but he also anticipates upside in the gadget makers that have been so hot.
On the other side of the trade is Jeff Macke, who has been long Intel (INTC) for a good part of the year. He stays in INTC because it’s a play on PC growth, which itself is a part of the global growth story that has become a cornerstone of the bull market. The stock is slow and steady, Jeff says. It doesn’t offer him huge gains overnight, but there’s also limited downside.
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Trader disclosure: On Oct 8, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders
Macke Owns (EMC), (INTC), (SWY), (ATVI), (JWN): Najarian Owns (MON), (NAT), (VCLK): Seygem Asset Management Owns (AA), (AAPL), (ABV), (ITU), (MSFT), (TWX), (GLD), (SBUX), Seygem Asset Management Owns FEMSA: Oppenheimer & Co. Is A Market Maker In (DRYS), (ESEA), (TIVO), (VCLK), (ATVI), (ERTS), (CPKI), (RIMM)
Oppemheimer & Co. Has Received Compensation For Investment Banking Services From (ESEA) Within The Past Year, Oppenheimer & Co. Will Receive Investment Banking Compensation From (ESEA) For Services Performed Within The Past Year, Oppenheimer & Co. Intends To Seek And Expects To Receive Compensation For Investment Banking Services From (ESEA) Within The Next Three Months
Oppenheimer & Co. Is A Market Maker In (CMCSA), Oppenheimer & Co. Has Received Compensation For Investment Banking Services From Comcast Corp. Within The Past Year
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