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No FANG for you: JPMorgan says sell momentum stocks

FANG (Facebook, Amazon, Netflix and Google) apps on a smartphone.
Adam Jeffery | CNBC
FANG (Facebook, Amazon, Netflix and Google) apps on a smartphone.

Despite a strong rally for the stock market since the lows in February, JPMorgan strategists warn that the broader sell-off in popular momentum names may not be over.

"We believe high momentum stocks may be at further risk in early April when most quant portfolios next get rebalanced," the firm's U.S. equity strategist, Dubravko Lakos-Bujas, wrote in a note to clients this week, defining one of the potential hurdles ahead.

"It is prudent for investors to avoid exposure to pure momentum stocks (at any price) and we advocate rotating into more reasonable valuation (i.e., momentum at reasonable price)," he added.

In the past 12 months, high-beta names like Facebook, Amazon.com, Netflix and Alphabet (Google), also known as FANG stocks, have seen their shares rally to new highs, posting returns greater than 35 percent.

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