Citigroup strategists led by Chris Montagu believe U.S. technology stocks could extend their recent rally as traders forced to cover sizeable short positions scramble to buy back shares.
Neutral Positioning Leaves Room for a Squeeze
Citi’s positioning models showed both the Nasdaq 100 and S&P 500 near neutral territory last Friday (scores of –0.3 and –0.5, respectively). However, the Nasdaq carries heavier legacy short exposure, meaning losses on existing shorts may prompt accelerated covering—which in turn could fuel additional upside in the index.
“Nasdaq short positions had already been in loss for some time and covering could add a further tailwind to index outperformance,” the strategists wrote.
Broader Market Context
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Risk flows into the Nasdaq ticked up modestly before the U.S.–China trade breakthrough, but overall enthusiasm for risk assets remained muted.
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All three major U.S. benchmarks share a “common setup” of above-average short interest, making them vulnerable to rapid reversals if sentiment shifts.
Across Europe, ETF flows have shown resilience—especially in the DAX and Euro Stoxx—yet positioning remains broadly neutral outside of continued bullish bias in European banking funds.
Tracking Today’s Movers
To see which tech names and ETFs are most active as shorts cover their positions, investors can check the real-time leaders using the Market Most Active API. This provides up-to-the-minute data on the stocks and funds driving volume—and potentially leading the short-covering rally.
