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Today’s Most-Shorted Stocks to Trade

All the major averages are in sync and humming smartly higher as investors look to close out the workweek. But remember, the market is still made up of thousands of companies. But in Wall Street’s most-shorted stocks, both bulls and bears are plying their muscle. And today, three of those names have caught our eye as stocks to trade based on very promising price charts.

For a second-straight week, the risk-off trade which pressured the Nasdaq to both relative and absolute weakness the past couple months and buoyed the more defensive and value-driven Dow Jones Industrials and S&P 500, have reached an agreement. And the bulls have come out on top. Well, almost.

All three indices are poised to finish with percentage gains this week. The Nasdaq is enjoying the largest rally as it adds more than 3.25% with Alphabet (NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT) leading the charge with above-the-market returns of around 6% and all-time-highs.

At the same time, lesser but decent climbs of 1.25% to 2.25% in the Dow and S&P 500 have been accentuated by new all-time-highs.

But that rising tide isn’t floating all boats. The market’s most-shorted stocks remain a mixed bag to the delight of bulls and bears positioned on the right side of the action. And there’s little reason to believe that trend is going away anytime soon.

  • Ontrak (NASDAQ:OTRK)
  • Blink Charging (NASDAQ:BLNK)
  • Gogo Inc (NASDAQ:GOGO)

Bottom line, volatility remains strong for many of these heavily shorted names. And that means potential opportunity. Moreover, a survey of those price charts has revealed three of the market’s most-shorted stocks as trades for bulls and bears entering next week.

Most-Shorted Stocks to Trade: Ontrak (OTRK)

Ontrak (OTRK) bearish flag formed around 76% retracement level
Source: Charts by TradingView

The first of our most-shorted stocks to trade is Ontrak. OTRK is the new GameStop (NYSE:GME) in that it holds the vilified top spot of stocks with high short-interest. But the buck or comparisons stop there for the telehealth outfit.

Along with the likes of Teladoc (NYSE:TDOC), OTRK benefited handsomely this past year during the pandemic on the back of virtualized patient healthcare. But on March 1, shares were slammed as the company slashed its outlook following the unexpected loss of its largest customer.

With bearish short interest of more than 43% refusing to exit the beaten-down name, notice has been served. What’s more, with this most-shorted stock setting up in a bear flag pattern centered at the 76% retracement level and stochastics bearishly crossed in oversold territory, this sick-looking stock may be on the cusp of becoming deathly ill.

If this week’s low and well-aligned flag support are broken next week, I’d elect to go with a bearish May $25/$22.50 put spread in this most-shorted stock.

Blink Charging (BLNK)

Blink Charging (BLNK) entering right side of corrective base
Source: Charts by TradingView

The next of our most-shorted stocks to trade is Blink Charging. I wrote about EV charging station stock a week ago. It’s short-interest stands near 42% and the expectation is for those bets, along with fresh buyers, to act as bullish fuel in the weeks ahead.

So far, shares have cooperated with our prior detailed weekly inside candlestick buy signal. But given the depth of BLNK stock’s corrective base and price movement thus far, this most-shorted stock is one which still offers a very reasonable spot to go long.

Today, Blink shares are parked just north of its large bottoming candlestick, which back in early March found support off the 62% retracement level. Along with stochastics trending nicely out of oversold territory and shares just entering the right side of its corrective base, there’s plenty of good-looking upside potential to profit from.

The May $45/$55 bull call vertical still looks like a winner in this most-shorted stock. However, given the additional pattern confirmation, moving out and up a bit to the June $48/$60 call vertical is another bullish spread combination to consider.

Gogo Inc (GOGO)

Gogo (GOGO) corrective bottom confirmed
Source: Charts by TradingView

The last of our most-shorted stocks to trade is Gogo. The popular airline broadband and wireless entertainment services outfit is the market’s fourth most-shorted stock with nearly 41% of its float borrowed by bearish operators. As with BLNK stock though, this name is a stock to buy.

Technically, GOGO stock is the strongest of the three. Unlike OTRK, which is desperately trying to hold the 76% retracement level, or BLNK’s 62% successful test, shares have managed to hold. And, this week they confirmed a bottoming doji candlestick set against the 50% level. With an oversold stochastics indicator also signaling a bullish crossover, this most-shorted stock is poised to fly higher.

Right now, the August $13/$17 bull call spread is a favored way to position in this most-shorted stock. With nice upside potential during sunnier conditions and the ability to avoid more significant damage in the event of a hard landing, I like the looks of that combination both off and on the price chart.

On the date of publication, Chris Tyler does not hold, directly or indirectly, positions in any securities mentioned in this article.

Chris Tyler is a former floor-based, derivatives market maker on the American and Pacific exchanges. The information offered is based on his professional experience but strictly intended for educational purposes only. Any use of this information is 100%  the responsibility of the individual. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.


Article printed from InvestorPlace Media, https://investorplace.com/2021/04/todays-most-shorted-stocks-to-trade-2/.

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