(Bloomberg) — Trading ideas are stacking up for what’s set to be a difficult second-quarter earnings season featuring a wide variation in performance due to the coronavirus pandemic.

Stocks have surged from March’s lows despite the bleakest profit outlook since the global financial crisis, with S&P 500 earnings expected to drop about 44%. Megacap technology firms led the stimulus-fueled rally and a key debate is whether they will keep that role as the earnings picture becomes clearer.

“For all but a fortunate few — notably among the FAANGs — the earnings numbers will be abysmal,” Tan Kai Xian, a statistician and U.S. analyst at Gavekal Research, wrote in a note, using a common acronym for big tech stocks. But there’s a “reasonable prospect” of brighter estimates and positive second-half surprises, which would support stock prices, he said.

Here’s a rundown of some recent thinking going into the earnings season:

Performance Reversal

Julian Emanuel, head of equity and derivatives strategy at BTIG LLC, raises the prospect of leaders and laggards swapping roles, after stocks such as eBay Inc. and Amazon.com Inc. rallied 20% or more from a June 8 peak in the S&P 500, while companies like JPMorgan Chase & Co. and General Motors Co. fell more than 10% over the period.

“We view earnings season as a potential catalyst for performance reversion,” he wrote in a note, while also adding that “if 2020 has taught us anything, it is that anything can happen — and probably will.”

Tech Risk?

Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management, flags the possibility that disappointing earnings and guidance from technology companies may be an “underappreciated” risk. Investors should consider adding gold, corporate credit and non-U.S. stocks to portfolios that are overweight the S&P 500, she wrote in a note.

Options

Amy Wu Silverman, derivatives strategist at RBC Capital Markets, sees an opportunity for investors to use the current high premiums in call options in their favor. Specifically, she recommends call spreads on Amazon and Netflix Inc. — a strategy that involves both buying and selling the bullish options but with different strike prices — as a way to profit from further modest gains in their stock prices.

Long Financials

Evercore ISI strategists led by Dennis DeBusschere have recommended going long financials into the earnings season because “there’s upside potential for a battered-down sector that’s priced in negative headlines already.”

Industrials

Stuart Kaiser, head of equity derivatives research at UBS Securities LLC, recommends call options on the Industrial Select Sector SPDR Fund to position for upside in earnings, as the firm’s “big data” analysis shows revenue for industrials above consensus heading into the reporting season.

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