The S & P 500 is up nearly 8% so far this year, and there are signs that certain sectors and stocks are overbought. Big Tech in particular is nearing or at new highs and dominating indexes . In the first quarter, most gains came from just a few mega-cap stocks in the S & P 500 . Now’s a good time to be making some changes to your portfolio, Dave Sekera, chief U.S. market strategist at Morningstar, told CNBC’s ” Squawk Box Asia ” on Wednesday. “Now’s a good time to reduce your exposure and global growth stocks to more of a market weight from an overweight and I think you can put that into the value category,” he said. “And I think a lot of the cyclical sectors are still very undervalued.” Sekera added that U.S. markets are “bumping up against top of trading range we have been in since last fall.” “Expect rough road ahead over next few quarters,” he said in notes sent to CNBC on Wednesday. “I doubt there is a meaningful breakout to upside until we see a rebound in leading economic indicators.” Discounted stocks Though some parts of the market are already in overbought territory, Sekera said some stocks that Morningstar is bullish on are still trading at a discount to its fair value estimates. One of them is Alphabet , which is already up 37% this year. “Alphabet has had a great run,” he said. “It’s still a four-star-rated stock [and it] trades at almost a 20% discount.” According to FactSet, analysts give the stock average potential upside of 8%. “Even a lot of the traditional names [like] Warner Brothers , AT & T — five-star-rated stocks — [are] trading well below our fair values and we think those are good opportunities for investors today,” he added. As for banks, he named Charles Schwab , which he said is trading at about a 25% discount to Morningstar’s fair value estimates. “So I think there’s a lot of good opportunities to pick through here, where they just got pulled down just because the entire sector was getting pulled down by the regionals,” said Sekera, referring to the regional bank crisis in the United States. According to FactSet, analysts give Charles Schwab average potential upside of 27%. Sekera also liked plays on the transition to electric vehicles, naming areas such as lithium and electric auto parts. Lithium producer Lithium Americas is trading at a 54% discount to Morningstar’s fair value estimates, while U.S. automotive supplier BorgWarner is at a 41% discount. — CNBC’s Michael Bloom and Bob Pisani contributed to this report.