Zachary Scheidt

Tech Stocks Rally

Of the names mentioned driving the Nasdaq 100, several appear overvalued and sensitive to an economy that has yet to prove its resiliency.

Expedia in particular strikes me as having significant risk. While we made a case for owning the stock late last year - albeit a bit early (zachstocks.com/2008/12.../) the stock is closely tied to consumer spending which is still not seeing significant recovery. With unemployment high and businesses cutting expenses, this stock could quickly see both earnings and multiple contract which would be devastating for the longs.

On a similar note, China's Ctrip.com could face a similar fate. (zachstocks.com/2009/06.../) - The stock is sitting at a level that has proven to be resistance (near $47.50) and is valued at about 40 times this year's estimates. It would take a lot of growth to justify this price.

Opportunities to short or buy puts on NASDAQ names certainly look attractive in today's market.