S& P 500 hits all time highs U.S.-Japan trade deal optimism
The most crowded long positions within UBS’ Softlines coverage universe currently include TPR, TJX (NYSE:TJX), and ROST, with TPR, HBI, FL, GIII, and ONON seeing the most significant positive shifts in crowding scores over the past three months. This implies an increasing number of long positions in these stocks among eligible funds.
According to UBS, a "crowded long" is characterized by a high percentage of eligible funds owning a stock, while a "crowded short" is defined by a high percentage of eligible funds shorting a stock.
Conversely, stocks such as GAP, AS, KTB, LULU, and M have witnessed the largest negative changes in their crowding scores, indicating a decrease in the number of long positions or an increase in short interest.
UBS also highlights a proprietary "Three-Factor Crowding Momentum" score, which suggests that crowding long momentum—where a stock is crowded, has become more crowded over the last three months, and its price has underperformed over the last month—can be a strong performance indicator over time. Currently, stocks like BOOT, FL, TPR, and URBN exhibit the most crowding long momentum.
Interestingly, no Softlines stocks are currently showing crowding short momentum, which is characterized by stocks that are crowded on the short side, have become more crowded shorts over the last three months, and have outperformed over the last month. Historically, this factor has shown weak performance.
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