The S&P 500 has risen nearly 8% so far this year, amid signs that certain sectors and stocks are overbought. Large tech companies in particular are near or at new highs and dominate the index. In the first quarter, most of the gains came from just a few mega-cap stocks in the S&P 500. Dave Sekera, Morningstar’s chief U.S. market strategist, said Wednesday on CNBC’s “Squawk Box Asia” that now is a good time to adjust your portfolio. “Now is a good time to reduce your exposure and global growth stocks from overweight to more market weight, which I think you can put into the value category,” he said. “And I think many cyclical sectors are still very undervalued.” Sekera added that U.S. markets “are hitting the top of the trading range we’ve been in since last fall.” He said in a note to CNBC on Wednesday: ” Expect a bumpy road ahead in the next few quarters.” “Until we see a rebound in the leading economic indicators, I doubt there will be a meaningful breakout to the upside.” Discounted stocks While some parts of the market are already in overbought territory, Sekera said, Some of Morningstar’s favored stocks are still trading below their fair value estimates. One of them is Alphabet, which has risen 37% this year. “Alphabet is doing very well,” he said. “It’s still a four-star-rated stock (and it’s) trading at a nearly 20% discount.” According to FactSet, analysts see an average 8% potential upside in the stock. “Even a lot of the legacy names[like]Warner Bros., AT&T — five-star stocks — are trading well below our fair value, and we think those are great opportunities for investors today,” he added. As for the bank, he named Charles Schwab , which he said trades at about 25% below Morningstar’s fair value estimate. “So I think there’s a lot of good opportunity here to pick from because the whole industry was pulled down by the regional banks, so they just got pulled down,” Sequela said, referring to the U.S. regional banking crisis. Analysts see an average potential upside of 27% for Charles Schwab, according to FactSet. Sekera also likes the drama about the transition to electric vehicles, naming areas such as lithium and EV components. Lithium producer Lithium Americas is trading at a 54% discount to Morningstar’s fair value estimate, while U.S. auto supplier BorgWarner is trading at a 41% discount. — CNBC’s Michael Bloom and Bob Pisani contributed to this report.