Finish finally week, trader Todd Gordon added to his position in hot semiconductor stock Nvidia.
This week, he’s looking to empty two of his top performers that he said have run their course.
“Two stocks that you might find surprising are going to be booted out [of my portfolio],” Gordon, founder of TradingAnalysis.com, told CNBC’s “Trading Nation” on Wednesday. “The first one that I desire to cut, unbelievably, is Zoom Communications. We’ve had a great run in it. I don’t like the way the stock is trading here from a technical point of view. From a cardinal point of view, it’s really overvalued.”
Zoom Communications trades at 127 times next year’s earnings, ably above the 48 times multiple for the IGV software ETF. Gordon added that the stock’s recent pullback pushed it lower than beneath its 50-day moving average, and he sees the possibility of it retesting its 200-day at $303. The stock currently trades at $376.
Gordon is unloading his full position — 15 shares — of Zoom.
“The other one that I want to get rid of is Beyond Meat. Again, a very, very overvalued house that is losing its strong technical position,” Gordon said, pointing to its rangebound trading in recent weeks. “It can’t have all the hallmarks to get through the $144 mark. I hope Beyond comes back. I like trading the stock, but I won’t get back in until we get privately above $150 in a momentum environment.”
Beyond closed Thursday just below $137 a share. Gordon unpacked his 50 shares of Beyond on Wednesday afternoon.
As he exited Beyond and Zoom, Gordon added a position in Spotify.
“I with this fundamental story behind it. I like the technical picture here,” he said. “They’re making a big move into peace, streaming content, diversifying away from music, which I think they did a really good job fending off all the deluge music services, Apple Music included.”
The stock has seen a “beautiful uptrend” over the long term, experienced some consolidation and a pullback and should resume its uptrend from here, Gordon said. He bought 25 cuts of Spotify.
Disclosure: Gordon holds shares of Spotify.