While one defining feature of the early 2024 meltup has been a powerful short squeeze of the most shorted names, there has been one sector that has failed to catch a bid from short covering; in fact, and on the contrary, this is the sector that tech longs have been aggressively shorting day in and day out to fund their longs in tech and elsewhere.
We are talking about energy, which is also one of the worst performing sectors this year.
But that may be changing: according to Goldman's Prime Brokerage, last week the US Energy sector saw the largest net buying in nearly 5 months, driven by long buys. As the bank shows in its "Chart of the Week", Cyclical sectors – Energy, Materials, Industrials, Financials, and Real Estate – were all net bought by HFs this week and collectively saw the largest notional net buying since Sep ’21.
