Could the tech sector soon see a warning flag that it's getting overvalued?

According to a Jan. 29 note from BofA Merrill Lynch Global Research, large-cap active managers' overweight positions in tech fell for the fourth time in the past five months. That puts tech exposure at 1.23x, its lowest level in 11 months.

"Tech remains the most overweighted sector, but the reduction in tech exposure was broad-based with relative exposures being cut for every tech industry over the past three months," BofA said.

Relative weights for FANG stocks Facebook Inc. (FB) - Get Report , Amazon.com Inc. (AMZN) - Get Report , Netflix Inc. (NFLX) - Get Report and Alphabet Inc. (GOOGL) - Get Report have been coming down for over a year.

"Interestingly, despite seeing one of the biggest declines in relative fund exposure over the past three months, the internet and direct marketing retail industry -- the best performer in 2017 -- remains the most overweighted industry in the S&P 500 today," analysts wrote.

This positioning is important, BofA wrote: "Over the last several years, buying the most underweight stocks and selling the most overweight stocks has consistently generated alpha, although performance in 2017 has bucked the trend."

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