Source : Reuters lire le PDF
Gastaldy favours a long position on the utilities sector index and a short position on the STOXX Europe 600 personal and household goods sector index, which includes luxury stocks such as LVMH, which has recently started to retreat.
Gastaldy sees the revival of the utility sector as a good opportunity to set up long/short pair trades - a popular strategy among hedge funds which involves buying, or going long, a sector and selling (going short) another based on their expected relative performance in the future. Such bets can also create a hedge against a potential pull-back in the overall market.
"You can see money flowing back into the sector," Day By Day's Gastaldy said. "The rally could go on as this could be a longer-term trend reversal. The sector has been decorrelated from the broad market, so it could well climb while the broader indexes move sideways."