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Tech Stocks Are Showing Signs of Overheating

The investor love affair with tech megacaps is showing signs of heating up to dangerous levels just ahead of a busy slate of earnings.

A net 39 of the Nasdaq 100 Index’s constituents are trading at a relative strength above 70 -- the most since June 2. The last time the group was flashing an overbought signal that strong, the tech-heavy gauge took a 5 percent tumble over the next month.