Nearly $10 billion worth of shorts were unwound last week on the
S&P 500, the largest rate since April, and $21 billion shorts
still remain and are in loss, analysts at Citi said.
"There is potential for further short squeezes supporting market
gains for another week or two given the size of the remaining
short base," they wrote in a report late on Monday, based on
data on the exchange traded futures.
They also said that at 4,000 points holders of long positions on
the index could be tempted to take profit, potentially holding
back the market in the short term.
The S&P 500 is up more than 5% so far in February and on Monday
it closed at a new all time peak of 3,915 points.
The surge comes after a social media-driven retail trading
frenzy targeted heavily shorted stocks, forcing big hedge funds
to close their bearish bets globally.
(Reporting by Danilo Masoni in MILAN; editing by Thyagaraju
Adinarayan)
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