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Apple: Trouble in iLand?

Tech investors are scrambling to figure out which end is up after Apple broke its 50-day move average while Cisco and Juniper action seemed very bullish.

Bear Case

The bears have been saying tech is overbought and on Friday they may have found the catalyst needed to take the sector lower.

Apple broke its 50-day moving average, a very negative technical sign.

In fact, this is the first time that the shares of Apple are trading below the 50 day moving average, since early March.

Technicians say, if Apple cannot recuperate from the selling pressure it will signal big technical damage.

Bull Case

However, the bulls won’t go down without a fight.

Also on Friday, shares of Cisco shot higher after the company said it had enough votes to take over Norway's Tandberg, the world's largest videoconferencing equipment maker. The acquisitions should make Cisco's equipment -- including the routers and switches that support online communications -- indispensable to business customers.

Meanwhile, shares of rival Juniper jumped after Goldman Sachs added the company to its "conviction buy" list, citing stronger demand for networking gear for data centers and communications networks.

It seems like the technicals in Apple are almost at odds with the fundamentals in Cisco and Juniper.

How should you trade the space?

The price action in Apple is interesting, says Guy Adami. Apple led us up and I can’t help but wonder if it’s about to lead us down. But you know what tech stock I do like? NTAP , he says.

I like Apple at these levels, counters Pete Najarian. There are a lot of fundamental reasons to be bullish. But there’s no denying that the technical action in this stock is a cause for concern. And elsewhere in tech, I see no reason to get off the chip trade; I’d look at Texas Instruments and Intel .

In semis I like Teradyne and Broadcom , adds Joe Terranova.

I don’t think the patterns in Apple's chart are as significant as many investors are making them out to be, says Katie Stockton of MKM on the Halftime Report. I see additional support around $185. In this positive momentum environment I think it’s still okay to own.

However if you’re looking to trade the space I’d consider looking at Dell , which has underperformed.

What do you think? We want to know!


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Trader disclosure: On Dec. 4th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Najarian Owns (AAPL) Calls; Najarian Owns (AMAT) Calls; Najarian Owns (BAC) Calls; Najarian Owns (DD) Calls; Najarian Owns (GE) Calls; Najarian Owns (INTC), Is Short (INTC) Calls; Najarian Owns (TXN), Is Short (TXN) Calls; Najarian Owns (HUN) Calls; Najarian Owns (CLF), Is Short (CLF) Calls; Najarian Owns (HUN) Calls; Finerman Owns (GGWPQ), (TBT); Finerman's Firm Owns (BAC) Preferred, (BAC), (BAC) Call Spread; Finerman Owns (BAC) Preferred, (BAC); Finerman's Firm And Finerman Own (WFC) Preferred; Finerman's Firm Owns (M), (MSFT), (WMT), (CBY), (PLCE); Finerman's Firm Is Short (KFT), (IJR), (IWM), (SPY), (MDY), (USO), (UNG); Terranova Works For (VRTS); Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.

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