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Options Action: Two Tech Trades

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If you’re looking for a trade, Jon Najarian suggests looking at tech.

The sector has long been a favorite among investors who believe it will be among the first to recover – and currently most technology stocks are trading at historically low prices.

Although there are countless ways to game it Jon Najarian suggests putting Electronic Arts and Ciena on your radar.

“I’d keep a close eye on these two,” he says on CNBC's Closing Bell, largely due to recent call buying. "Both could be consolidation plays (or takeover targets). And, at current valuations, both look compelling.”

Najarian isn’t the only one who’s thinking M&A.

Peter Falvey, co-founder of technology-focused investment banking firm Revolution Partners, says activity could pick up at the end of the first quarter, once buyers and sellers assess how much cash they have and what their earnings look like.

And it’s worth noting that a PricewaterhouseCoopers report on the 2009 M&A Outlook predicted that in tech, there will be "aggressive acquisition activity from industry leaders ... as they take advantage of once in a decade low prices to pursue strategic portfolio fill-ins as well as cross-sector transformative deals."

There will be action in the Internet, software, computers and networking sectors, the report said. Clean technology is another area where bankers expect deal-making. Desperate to cut production costs, chipmakers may look for partners.


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