Investors who delayed selling stocks to lock in Trump's low tax rates, may bail now, Jefferies says

A pedestrian carries an umbrella as she passes by the New York Stock Exchange.
Brendan McDermid | Reuters

The anticipation of lower taxes under Donald Trump led investors to hold onto their best-performing stocks through the end of 2016, according to Jefferies. Those stocks could now come under pressure as that trend unwinds, the firm said.

"We contend that investors were in the midst of a selling strike late in 2016, as capital gains tax is thought to be lower in '17 than in '16. The winners from last year could be under pressure, and although five days does not make a trend, the gainers in 2016 are lagging YTD," equity strategist Steven DeSanctis wrote in a note to clients this week.

"Now that the calendar has turned to 2017, investors could unwind their big winners, as they are not comfortable with their valuations and want to take profits in these stocks," he explained.

In contrast, DeSanctis says names that underperformed last year are up an average of 3 percent in 2017, and may continue to outperform.