Europe's time in the sun is over and investors should be refocusing their strategies on the U.S., according to one analyst who is betting against the "crowded trade."
Chris Watling, chief executive at Longview Economics, told CNBC Wednesday that Europe is now overdone and the region is at risk of facing another downturn if investors continue to buy into the rally.
"What worries me is that Europe has become the crowded trade. It's fund managers' favourite trade, everyone's overweight," said Watling.
"If you look at some of the technical metrics – how many stocks are overstretched – they're back at the extremes we saw when Europe last peaked in April 2015."
"The time to move overweight Europe is done and in fact you should be drawing that down and shifting, probably to the U.S.," Watling suggested.
Europe has undergone a resurgence in interest over recent months as investors have seen opportunities to find value amid continued geopolitical risk.