Linda Shesto, managing director at Divine Capital, told CNBC’s “Squawk Box” that she is looking for a market correction of 3 percent to 5 percent.
“We’re viewing the market with limited upside potential,” Shesto said Thursday. “We have accumulating negatives coming into all of our technicals. Our internal strength indicators are weakening as prices move up. In addition to all the market jitters, this leads us to believe that the market is in for at least a 3 percent to 5 percent correction.”
Shesto said she didn’t expect the market to drop in a single shot. Instead, she expects a “zig-zag pattern.”
“If we do hit the 3 percent to 5 percent in the near term, I think there will be some sideways movement,” she said.
Shesto said she likes technology, especially semiconductors -- but remains “very cautious” about the sector. She recommends that investors devote 10 percent to 15 percent of their portfolio to "overseas" stocks.