×

Teflon Tech To Continue?

As you might remember from Wednesday’s Fast Money of all the sectors in the S&P, tech was the only one to close out the first quarter of ’09 in the green – it was up 4%.

But teflon tech might be starting to scratch. That is, the sector’s strength may be starting to fade.

On Monday, Cisco shares slid substantially and was one of the top drags on the Nasdaq after Goldman Sachs cut the stock to a "neutral" rating and removed it from the firm's "Conviction Buy" list

Meanwhile, IBM's talks to acquire smaller computer and software rival Sun Microsystems broke down on Sunday after Sun rejected IBM's $7 billion offer.

Considering the negative news, how should you trade? For insights we turned to Ryan Jacob, Jacob Internet Fund Portfolio Mgr.

Jacob tells the desk that although there could be weakness in the tech sector, you can still profit by investing selectively.

The trick, he says, is to find a trend that's working. That is a trend that's strong enough to allow companies to grow even if the overall sector shrinks.

And he thinks one area of growth will come from Internet search advertising.

Zach Karabell concurs. "You can have contraction in overall ad spending yet still have growth in niche areas such as Internet advertising."

And which firms dominate Internet search advertising?

That's Google and Yahoo .

As you might imagine Jacob is bullish on those two names no matter what happens in the rest of the sector (or the rest of the market for that matter) becuase "Internet search advertising should grow in 2009."

______________________________________________________
Got something to to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment but not have it published on our website send your e-mail to fastmoney@cnbc.com.

Trader disclosure: On Apr. 6th, 2009, 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 (WFC), (AAPL), (SDS), (GS), (MOS), (WMT); Seymour Owns (AAPL), (BAC), (EEM), (FCX), (FXI), (F), (MSFT); Terranova Owns (KCE), (AMGN), (IBM), (HESS), (BRCM), (DIS), (DELL), (JPM), (INTC), (X), (JOYG), (WYNN); Terranova owns (COP) Calls; Terranova Owns (POT) & (POT) Calls; Terranova owns (XOM) & (XOM) Calls; Karabell Owns (AAPL), (CSCO), (FCX), (FXI), (GOOG), (JPM), (NOK), (NVDA)