6 Hot Stocks Screaming 'Short Squeeze'

SunGard's Astec Analytics delivers intraday short-selling market data to its clients. Astec Analytics’ top pick from a securities lending perspective this week was none other than Apple Inc. AAPL.

Other stocks that that saw plenty of short-selling activity included the following:

  • Fitbit Inc FIT
  • SolarCity Corp SCTY
  • Chesapeake Energy Corporation CHK
  • Cliffs Natural Resources Inc CLF
  • MannKind Corporation MNKD

Here's a look at Karl Loomes' list of top stocks in the Americas from a security lending perspective.

Apple

The tech behemoth was this week's top pick in the Americas, following news about European regulators expanding their investigation into "Ireland's so called sweetheart tax deal with the company." Although this is not the only investigation into the company's tax practices, the news has increased the pressure on the stock during the week.

On the securities lending front, the firm's data suggests higher short-selling activity, with the number of Apple shares being borrowed surging about 14 percent over the week.

Fitbit

Fitbit moved up to the first spot in this week's list, as several insider share sales continued to add pressure to the stock. Moreover, shareholders are "seemingly taking the recent gains following Black Friday sales to take profits."

Having said this, Astec's data also suggests this pressure has resulted in some short covering, with borrowing volumes down 21 percent during the week.

SolarCity

SolarCity fell one spot over the week, but was still in the spotlight as "outspoken CEO Elon Musk continued to make headlines, calling for a revenue-neutral carbon tax and likening the tactics used by climate change deniers to those of the cigarette industry when denying their product caused cancer," Loomes explained.

This month has seen the stock make nice gains in the cash market, while on the securities lending front, the firm's data suggests a similar trend among short sellers, as borrowing volumes declined 14 percent in December.

Chesapeake Energy

In third was Chesapeake, which continues to get investors' attention as the potential for its bonds to be reduced to junk status prevails, same as "the limitations it may have in future in raising finance thanks to the lower price of oil."

While the company's shares have witnessed mixed trading in the cash market, Astec's data suggests short sellers have been constructing positions for over a month now. Over this period, volumes have surged by almost 10 million shares.

Cliffs Natural Resources

Cliffs climbed one spot this week, after it was confirmed that Champion Iron Ltd. had entered into an asset acquisition agreement for the Bloom Lake mineral claims and rail assets currently held an affiliate of Cliffs, as the company restructures.

Following substantial gains in the borrowing data in November, the firm's figures show the trend has been slightly reversing lately, with borrowing volumes having declined roughly 7 percent in December. Meanwhile, the cost of borrowing has tumbled from more than 90 percent to just under 45 percent.

MannKind

Finally, there's MannKind, which has seen its stock plummet more than 35 percent since the beginning of December. Meanwhile, on the securities lending front, Astec's data shows the number of shares being borrowed -- "the prerequisite and thus proxy for short selling" -– has increased by 8 percent. This is "classically a bearish signal on the part of short sellers who are willing to bet on the downside even as the stock is already losing ground."

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.

Posted In: Astec AnalyticsKarl LoomesSunGardAnalyst ColorShort IdeasTop StoriesAnalyst RatingsTechTrading Ideas

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