As tech underperformed in 2013, hedge funds shied away, favoring sectors such as health care and financials. But that trade could be turning around in 2014.
"Overall hedge fund tech exposure, as measured by long/short ratio, is the lowest it has been since January 2009, and by a lot," said David Seaburg, head of equity sales trading at Cowen & Co. "I think we will start to see money rotating out of health care into tech, which is something we have not seen."
In 2013, the information technology sector underperformed the S&P 500 by more than 3.4 percent, while consumer discretionary and health care were the top performers.
Over the first few weeks of 2014, it's been a different story. Technology is outperforming the market by nearly a full percentage point. And out of the 10 S&P sectors, information technology is one of only three in the green (although it is joined there by 2013 darlings health care and financials).
Hedge fund exposure to technology is far surpassed by exposure to consumer discretionary, financials and energy, Seaburg said.
"That could be an indication that they're underweighted," Seaburg said. As profit-taking potentially ensues in industries like biotech, which rose nearly 75 percent in 2013, "money could peel out of high-flying names and find a home in some of the underappreciated tech names," such as Cisco, Intel and Apple.
(Read more: Hedge funds lose out to stellar stock markets)