US investors overvalue technology stocks – warning of impending downturn

US investors overvalue technology stocks – warning of impending downturn

According to a report by www.finanznachrichten.de, Citigroup equity strategists see risk of a major sell-off in U.S. stocks, particularly Big Tech stocks, due to dangerously high bullish positioning by investors in the Nasdaq-100. According to Citi strategists, the positioning in the Nasdaq 100 futures has been stretched dangerously upwards. Short positions in index futures have been “completely eliminated,” the team warns. Bullish positioning is currently at 97 percent compared to the past. Many of these bullish investors are sitting on relatively small profits, making their positions even more vulnerable.

As a financial expert, I can confirm that dangerously high bullish positioning poses serious downside risk to the market. When a large number of investors are positioned in the same direction, a sudden drop in price can lead to panic selling, which can trigger a prominent downward trend.

Based on the analysis of the facts from the article, it is likely that a sharp correction or even a crash could occur in the stock market if the bullish positioning is not dismantled. This could have a particularly big impact on Big Tech stocks like Apple, Amazon, Facebook and Google, which are heavily represented in the Nasdaq-100.

Investors should therefore be careful and diversify their portfolios to protect themselves against possible price declines. It is important to keep an eye on positioning and look out for possible warning signs of a trend reversal.