Tech just got wrecked, said Benzinga PreMarket Prep co-host Dennis Dick.
Apple Inc. (NASDAQ:AAPL) “got hit hard.”
Western Digital Corp (NASDAQ:WDC) lost 16 percent over the last eight trading sessions, and Square Inc (NYSE:SQ), after a 264-percent run, conceded 24 percent.
“This is rotation station we are in right now and tech is out of favor and value is back in favor,” Dick said.
Who’s Sitting Pretty?
“They like those no-growth stocks right now, and that’s what the money is all flying into,” Dick said. “Long-term, I don’t think this makes a hell of a lot of sense, but short-term, that’s the trade.”
But they should always be ready to cash out, as the stocks plunge faster than they rise and risk getting stuck in a rut.
How To Play It
So while value stocks are popping, Dick doesn’t see the trend lasting long.
“It is getting way overdone,” he said, noting that the stocks are low growth and not worth buying now. “If I had any of these in my investment portfolio, I would be ringing the register on these things right now.”
PreMarket Prep co-host Joel Elconin suggested parking the money pulled from tech plays.
“You park that money for a little bit, maybe sell some calls, finance, buy some puts with it, you try and go delta neutral like that and then you get this kind of rally and you get the principle appreciation,” Elconin said.
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