By Bret Jensen:

After a strong rally over the last five months the market now stands at four year highs. Given the continuing unfolding crisis in Europe, I think the market should have at least a decent pullback at some time over the coming few months. One sector that looks increasingly vulnerable is the tech sector, especially those stocks with stretched valuations that have had great runs over the last few months. Here are three I would avoid at these levels. For more aggressive investors, they should be considered as short candidates.

Rackspace Hosting (RAX)

Business description from Yahoo Finance (see here):

Rackspace Hosting, Inc. operates in the hosting and cloud computing industry. It provides information technology (IT) as a service, managing Web-based IT systems for small and medium-sized businesses, as well as large enterprises worldwide.

4 reasons RAX is overvalued at $47 a share:

  • The stock is selling at the top of

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