Will Traders Betting Against Apple And Microsoft Get Burned? Here's Jon Najarian's Warning

Zinger Key Points
  • The momentum has led the markets on a downward trajectory, but now that markets are in correction territory, stocks could find some support, says CNBC's Jon Najarian.
  • "I think some of the people that are getting in late will probably get shaken out and then we'll get another shot at seeing exactly if we can stabilize."

Bearish bets against big tech stocks continue to pile up as traders anticipate more downside ahead in the markets. Short sellers are reportedly increasing their positions at the fastest rate in years.

Market Rebellion co-founder Jon Najarian understands the idea behind the trade but warned that traders who are just now initiating short positions as the markets enter correction territory are likely to get burned.

"You don't want to bet against the Fed and you certainly don't want to bet against momentum," Najarian said Wednesday on CNBC's "Fast Money Halftime Report."

The momentum has led the markets on a downward trajectory, but now that markets are in correction territory, stocks could find some support, Najarian said.

A lot of the big tech stocks that people are trying to ride lower have held up well relative to the rest of the market. That doesn't mean stocks like Apple Inc AAPL and Microsoft Corp MSFT have to go 25% lower, he stressed.

Related Link: What Are Whales Doing With Apple

"Even though they are two of my biggest positions, I would add on those stocks," Najarian said. He highlighted the tech giants' recurring revenue. People aren't going to stop using cloud services because of Russia-Ukraine tensions, he added.

The traders who have been buying puts in these stocks could be getting in late, Najarian said, suggesting the market could bounce.

"I think some of the people that are getting in late will probably get shaken out and then we'll get another shot at seeing exactly if we can stabilize."

AAPL, MSFT Price Action: At publication time, Apple was down 1.84% at $161.30 and Microsoft was down 1.78% at $282.59. 

Photo: courtesy of Apple.

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Posted In: Long IdeasOptionsMarketsTechMediaTrading IdeasCNBCJon Najarian
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