Potential short squeeze plays gained steam in 2021, with new retail traders looking for the next huge move.
A short squeeze can occur when a heavily shorted stock rises in value instead of falling. Short sellers could be looking to close out their position and can face a loss if they have to buy back the shares they initially borrowed at a higher price.
A squeeze can occur when short sellers are forced into buying to cover their position, which can cause shares to move up higher on many occasions.
Fintel Data: Data from Fintel, which requires a subscription, provides a look at several of the top shorted stocks and data on how likely a short squeeze is to occur.
Here’s a look at Fintel’s top five short squeeze candidates for the week of March 28.
Enservco Corp: Oil and gas services company Enservco Corp ENSV makes the jump from second place last week to top the list for the week of Mar. 28. Fintel shows 30% of the float short, down slightly from last week’s 32%. The cost to borrow on shares is 171%, which is also down from 205% and 245% from the previous two reports respectively. Short interest was up 316% in the latest monthly report and could be higher when new numbers come out given the sharp rise in oil stocks due to geopolitical issues.
Guardforce AI: Security solutions company Guardforce AI GFAI joins the short squeeze top five with a 504% increase in short interest over the last month. Fintel shows 38% of the float short and a cost to borrow of 239%.
Nine Energy Services: Oil and gas services company Nine Energy Service Inc NINE comes in third place on the short squeeze leaderboard for the week. Short interest was up 92% in the recent monthly report. A total of 21.7% of the float is short. The cost to borrow on Nine Energy Service shares is 74.8%.
Houston American Energy Corp: Oil and gas exploration and development company Houston American Energy Corp HUSA has 20.4% of its float short, according to the latest report. Short interest is up 441% in the latest monthly report. The cost to borrow on shares of Houston American Energy Corp is 124%. Shares of Houston American Energy went from the $2 level to start the month of March and then rose to 52-week highs of $16.61 on March 8. Shares have since fallen back to $7.50, but with a large increase over the previous month's close could be a big target for shorts given the sharp one-month increase.
Indonesia Energy Corp: Oil and gas exploration company Indonesia Energy Corp INDO falls from the top of the leaderboard to fifth place. Fintel shows 31.8% of the float short, down from last week’s reported 80%. The cost to borrow on shares remains high at 309%, but is down from previous figures of 379% and 771%. Indonesia Energy Corp topped the leaderboard for two straight weeks before giving way to other oil-related companies. Given the high short percentage and high cost to borrow, Indonesia Energy remains a strong candidate for a short squeeze.
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