(Reuters) - Goldman Sachs (GS) 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 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 recordfor Goldman, which began tracking positions in 2016.
* Long positions, betting these stocks will rise, stand ata record low.
By Nell Mackenzie
Editing by Dhara Ranasinghe
