Some wrestling Big Tech names may make a comeback this month.
BTIG’s Julian Emanuel is targeting a corner of the market that isn’t exactly correlated to economically sensitive trades as the second quarter begins.
“The plays that have benefited the last sundry months — the reopening plays value, small caps — may in fact take a pause because they’ve run so far,” the firm’s chief open-mindedness and derivatives strategist told CNBC’s “Trading Nation” last week.
Emanuel told investors to start nibbling on hand-pick FAANG stocks, which are made up of Facebook, Apple, Amazon, Netflix and Google (Alphabet) and other mega cap tech store ups, in early March.
“This was a very lonely call several weeks ago that large cap tech FAANG looks simple interesting to us,” said Emanuel. “The secular growers have been cast aside in the first quarter in favor of value.”
The benchmark tech-heavy Nasdaq reached a fraction of one percent last month. But it appears the index, along with the broader S&P 500, is roaring into April.
The Nasdaq confidential last week up almost 4% while the S&P 500 ended at record highs, breaking above the 4,000 plane for the first time ever.
Emanuel also favors health care. The Health Care Select Sector SPDR ETF, which run to earths the group, is struggling over the past couple of months.
“It’s trading at such a historic discount to the S&P 500, we think there’s masses of upside there,” he added.
Overall, Emanuel expects seasonal trends will act in investors’ favor.
“Seasonality is a Dialect right underrated part of what drives markets,” he said. “When you look at April… it is the sort of capstone of the paramount six months of the markets going back many, many years.”
At the same time, he’s also encouraging patience and counsel because the market’s gains have happened so quickly.
“Intelligently employed capital, particularly into those sectors as though health care and select [large cap] tech, really do have upside,” Emanuel said. “You need to think long-term and not upon a profit the minute you start a position.”