HEDGE FLOW-US software stocks to keep rebounding, says Goldman Sachs prime brokerage note

Goldman Sachs Group, Inc. +0.33%
S&P 500 index +0.11%

Goldman Sachs Group, Inc.

GS

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+0.33%

S&P 500 index

SPX

6582.69

+0.11%

By Nell Mackenzie

LONDON, Feb 26 (Reuters) - Goldman Sachs prime brokerage said in a note that the recent bounce in software and IT services stocks may continue, even though this week, hedge funds were as short as they have ever been on the sector.

A short position expects an asset price to fall.

The S&P 500 software and services index <.SPLRCIS> has tumbled over 18% this year so far, shedding more than $1.2 trillion in market value, according to LSEG data. But this week, stocks in this index recovered and the index rose over 4%

Key findings of the Goldman report:

  • Goldman Sachs prime brokerage believes that the recent recovery in software stocks will continue, it said in a note to clients on Wednesday, seen by Reuters on Thursday.

  • Software and IT services were the top two shorted U.S. industries on February 24th on Goldman Sach's prime brokerage trading desk.

  • Short positions have risen to the highest level on record for Goldman, which began tracking positions in 2016.

  • Long positions, betting these stocks will rise, stand at a record low.


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