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Will Dell, H-P Results Ignite Tech Trade?

With technology one of the few bright spots in an otherwise bleak market, what will Dell and H-P earnings reveal about the direction of the tech trade?

Dell

When Dell reports earnings on Thursday traders will be looking for signs that corporations have started spending again.

Dell's business is more reliant than competitors on enterprise or corporate customers, and their results should show if big companies are still pinching pennies. Most analysts expect to hear Corporate America remains cautious.

So far, big businesses have not returned to normal PC buying patterns, though some have begun upgrading their server computers.

Hewlett-Packard

By contrast H-P "is much more diverse in terms of products and geography," says Kaufman Bros analyst Shaw Wu. Largely HP has a strong presence in IT services.

When Hewlett Packard reports earnings on Wednesday, analysts will be watching HP's services unit as well as its profitable printer supplies business carefully, to see what they suggest about the health of technology spending.

What’s the tech trade?

I think Dell’s risk/reward is attractive, says Sanford analyst Toni Sachonnaghi. The stock is relatively inexpensive. I think we could see as much as 40% upside in Dell. I'm also bullish on IBM and H-P. They're trading around 11 times earnings while the market is trading around 14. That's a 20% discount. I think they're simply too cheap over the long term. The only questions in my mind is how quickly they come back.

I added to my position in technology on Tuesday, says Joe Terranova. I truly believe we see a move higher in the sector. (You can find Terranova's latest moves in Tuesday's Behind The Money post. Click here for more.)

I’m a little concerned about the impact of a stronger dollar on the sector, counters Tim Seymour. Many companies receive a large percentage of their revenue from overseas. That's a major headwind.


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Trader disclosure: On February 16, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Finerman's Firm And Finerman Own (GGWPQ); Finerman's Firm Owns (BAC), (BAC) Leaps; Finerman Owns (BAC), (BAC) Preferred, (BAC) Leaps; Finerman's Firm Is Short (IJR), (MDY), (SPY), (IWM), (UNG), (USO); Finerman Owns (AAPL); Finerman's Firm And Finerman Own (GOOG); Finerman's Firm Owns (KFT); Finerman's Firm Owns (NOK), (TGT), (WMT); Seymour Owns (AAPL), (AA), (CCJ), (FXE), (INC). (VALE), (X); Terranova Owns (AAPL), (GOOG), (RIMM), (JPM), (QCOM), (IBM), (MSFT), (DELL), (EMC), (PALM); Terranova Is Long Dec. 2010 Crude Oil Futures; Terranova Is Long Dec. 2011 Crude Oil Futures; Grasso Owns (ABK), (AAPL), (ASTM), (BAC), (BGP), (C), (COST), (CSCO), (FAZ), (PFE), (PRST), (WMT), (V); Seymour Owns (X); Jon Najarian Owns (AMR), (BAC), (BCS), (C), (GS), (HD), (MS), (SPG), (UBS), (TRA), (WFMI)

For Tim Seymour
Seygem Asset Management Owns (POT)
Seygem Asset Management Owns (GFI)
Seygem Asset Management Owns (POT)

For Joe Terranova
Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
Virtus Investment Partners Owns More Than 1% Of (CLB)
Virtus Investment Partners Owns More Than 1% Of (DLR)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (XLP)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (SKT)

For Steve Grasso
Stuart Frankel & Co. Inc And Its Partners Own (AIZ)
Stuart Frankel & Co. Inc And Its Partners Own (ABX)
Stuart Frankel & Co. Inc And Its Partners Own (CUBA)
Stuart Frankel & Co. Inc And Its Partners Own (GERN)
Stuart Frankel & Co. Inc And Its Partners Own (GLG)
Stuart Frankel & Co. Inc And Its Partners Own (HSPO)
Stuart Frankel & Co. Inc And Its Partners Own (NWS.A)
Stuart Frankel & Co. Inc And Its Partners Own (NXST)
Stuart Frankel & Co. Inc And Its Partners Own (NYX)
Stuart Frankel & Co. Inc And Its Partners Own (PDE)
Stuart Frankel & Co. Inc And Its Partners Own (PRST)
Stuart Frankel & Co. Inc And Its Partners Own (RDC)
Stuart Frankel & Co. Inc And Its Partners Own (ROK)
Stuart Frankel & Co. Inc And Its Partners Own (TLM)
Stuart Frankel & Co. Inc And Its Partners Own (TOL)
Stuart Frankel & Co. Inc And Its Partners Own (XRX)
Stuart Frankel & Co. Inc And Its Partners Own (SDS)
Stuart Frankel & Co. Inc And Its Partners Are Short (QQQQ)
Stuart Frankel & Co. Inc And Its Partners Are Short (CL)

For Toni Sacconaghi
Sacconaghi Owns (PLMO), (STX)
Accounts Over Which Bernstein And/Or Affiliates Exercise Investment Discretion Own More Than 1% Of (DELL), (HPQ)
Bernstein Is A Market Maker In (DELL)
(DELL), (HPQ) Are Or In Past 12 Months Were Clients Of Bernstein (Non-Investment Banking, Securities-Related Services), Bernstein Recieved Compensation
An Affiliate Of Bernstein Received Compensation For Non-Investment Banking-Securities Related Services From (DELL), (HPQ)
Bernstein Or Affiliate Expects To Receive/seek Investment Banking Compensation From (DELL), (HPQ) In Next 3 Months

For Brian Kelly
Kanundrum Capital Is Short (TAO)
Kanundrum Capital Is Short (EWY)
Kanundrum Capital Is Short EURUSD
Kanundrum Capital Is Short GBPUSD
Kanundrum Capital Owns (SVU)
Kanundrum Capital Owns USDJPY
Kanundrum Capital Owns USDSGD
Kanundrum Capital Owns USDCHF
Kanundrum Capital Owns (C)
Kanundrum Capital Owns (JPM)
Kanundrum Capital Owns (NBG)
Kanundrum Capital Owns (EWP)
Kanundrum Capital Owns (HOV)
Kanundrum Capital Owns (TOL)
Kanundrum Capital Owns (PHM)
Kanundrum Capital Owns (WY)
Kanundrum Capital Owns (RYN)
Kanundrum Capital Owns (EWA)
Kanundrum Capital Owns (EWJ)
Kanundrum Capital Owns (EWC)
Kanundrum Capital Owns (POT)
Kanundrum Capital Owns (MOS)
Kanundrum Capital Owns (IPI)
Kanundrum Capital Owns (ELX)
Kanundrum Capital Owns (QLGC)
Kanundrum Capital Owns (VMW)
Kanundrum Capital Is Long USDJPY
Kanundrum Capital Is Long USDSGD
Kanundrum Capital Is Long USDCHF
Kelly Owns (HOV) Calls
Kelly Owns (ELX)
Kelly Owns (QLGC) Calls
Kelly Owns (FXE) Puts
Kelly Owns (HOV) Calls
Kelly Owns (AMZN) Calls
Kelly Owns (ELX) Calls
Kelly Owns (QLGC) Calls
Kelly Owns (FXE) Puts

For Brad Hintz
Accounts Over Which Bernstein And/Or Affiliates Exercise Investment Discretion Own More Than 1% Of (BAC)
(BAC) Is Or In Past 12 Months Was A Client Of Bernstein (Non-Investment Banking-Securities Related Services), Bernstein Or Affiliate Received Compensation For Investment Banking Services From (BAC) In Past 12 Months
Bernstein Or Affiliate Expects To Receive/Seek Investment Banking Compensation From (BAC) In Next 3 Months
Accounts Over Which Bernstein And/Or Affiliates Exercise Investment Discretion Own More Than 1% Of Barclays PLC, Credit Suisse Group, (C), (GS), (JPM), (MS)
Barclays PLC, (C), Credit Suisse Group, (GS), (JPM), (MS), UBS AG Are Or In Past 12 Months Were Clients Of Bernstein (Non-Investment Banking-Securities Related Services), Bernstein Received Compensation
An Affiliate Of Bernstein Received Compensation From Barclays PLC, (C), Credit Suisse Group, (JPM), (GS), (MS), UBS AG (Non-Investment Banking-Securities-Related Services)
Bernstein Or Affiliate Received Investment Banking Compensation From (C) In Past 12 Months
Bernstein Or Affiliate Expects To Receive/Seek Investment Banking Compensation From Barclays PLC, (C), Credit Suisse Group, (GS), (JPM), (MS), UBS AG In Next 3 Months
Hintz Owns Morgan Stanley And Discover
Hintz Owns (CME)
Accounts Over Which Bernstein And/Or Affiliates Exercise Investmet Discretion Own More Than 1% Of (GS), (MS)
(GS), (MS) Are Or In Past 12 Months Were Clients Of Bernstein (Non-Investment Banking-Securities Related Services)
An Affiliate Of Bernstein Received Non-Investment Banking Compensation From (GS), (MS) (Securities Related Services)
Accounts Over Which Bernstein And/Or Affiliates Exercise Investment Discretion Own More Than 1% Of (IBM)
(IBM) Is Or In Past 12 Months Was A Client Of Bernstein (Non-Investment Banking-Securities Related Services), Bernstein Received Compensation
An Affiliate Of Bernstein Received Compensation For Non-Investment Banking-Securities Related Services From (IBM)
Bernstein Or Affiliate Intends To Receive/Seek Investment Banking Compensation From (IBM) In Next 3 Months


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