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One under-the-radar cloud stock could be headed higher as tech stumbles: Trader

These chart signs suggest tech rally has come to a halt, trader says

Big Tech has taken a tumble.

The QQQ Nasdaq 100 ETF, which includes tech heavyweights Apple and Microsoft, fell 2% on Wednesday as coronavirus cases spiked in U.S. hot spots.

Mark Tepper, president of Strategic Wealth Partners, is not worried the broad tech rally is coming to an end. He told CNBC's "Trading Nation" on Wednesday he continues to bet on growth areas in tech, such as "cloud, AI, data optimization, advanced chips."

However, while tech takes a breather, he is backing one little-discussed cloud stock that could continue higher.

"It's Cloudera. It's got maybe a $3-$4 billion market cap so it doesn't get talked about a lot, but it's got a lot going for it. We started our position about a year ago at around $6 right before Carl Icahn came, and now it's around $12," said Tepper.

Activist investor Icahn is Cloudera's largest shareholder at nearly 18%. Cloudera offers cloud-based data analytics and engineering to enterprise clients.

"The company is also a buyout candidate. If you think about a company like IBM, they already work with Cloudera. IBM's biggest issue is they don't know how to innovate, they can't create anything so they acquire, and at a $3 or $4 billion market cap, this would be a drop in the bucket for them," said Tepper.

Mark Newton, founder of Newton Advisors, is more concerned that the tech rally could be grinding to a halt.

"The QQQs seem to hit new highs every day, but when you strip out the Big Five [Apple, Amazon, Microsoft, Alphabet and Facebook] it certainly is a much different picture," Newton said during the same segment. "Take a look at the Nasdaq 100 equal weighted index versus just the Nasdaq. That certainly has not followed it back up to new all-time high territory."

The market-weighted Nasdaq 100 is up 15% this year, while the equal-weighted Nasdaq 100 has risen 6%. 

"Looking at the equal weighted technology index by Invesco, RYT, versus the SPY [which follows to S&P 500], you do see a pretty pronounced break just in the last couple weeks of a trend that's been existing for the last two months," said Newton. "You're starting to see a breakdown. … I do expect to see tech and the market lower over the next couple of weeks before this market can proceed higher."

Disclosure: Strategic Wealth Partners holds Cloudera.