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3 of the Most-Shorted Stocks That Have Great Price Charts

most-shorted stocks - 3 of the Most-Shorted Stocks That Have Great Price Charts

Source: Vladeep / Shutterstock.com

The bulls are acting a bit more reactively this week, as they embrace spooky seasonal tendencies in the broader market. Today, let’s explore three of the market’s most-shorted stocks. Each of these are already sporting larger corrections and bottoming patterns, which insist that the bears are overstaying their welcome.

It’s the bullish Roaring ‘20s right? Quite possibly. But as Wall Street inches its way toward Friday’s closing bell, a bit of more fearful behavior has begun to rear its head in the S&P 500 and Nasdaq.

Both bellwethers are now about 2% off their all-time-highs. Each is also flirting with price weakness that’s consistent with common typical market corrections of 2% to 5%. That could always work its way into the less typical and much larger risk-off phases.

In a market made up of stocks, strong correlation isn’t a hallmark of the Wall Street’s most-shorted stocks. Apple (NASDAQ:AAPL). Microsoft (NASDAQ:MSFT). Yes. Workhorse Group (NASDAQ:WKHS) or the newest short-interest title holder Greenidge Generation (NASDAQ:GREE) at 68%? Not so much.

  • Lordstown Motors (NASDAQ:RIDE)
  • fuboTV (NYSE:FUBO)
  • Corsair Gaming (NASDAQ:CRSR)

In the spirit of having a positive outlook and understanding that there’s always a bull market somewhere (and that bottoming patterns in most-shorted stocks arguably have what it takes to succeed), let’s look at three of those names which are ready for bulls and apes alike.

Most-Shorted Stocks to Buy: Lordstown Motors (RIDE)

Lordstown Motors (RIDE) three week pullback pattern confirmed
Source: Charts by TradingView

The first of our most-shorted stocks to buy is electric vehicle pickup truck play Lordstown Motors. RIDE stock has been a battleground name that bears have been winning handily. But with today’s short interest of 28% in mind, it appears the bears are at risk of overstaying their welcome.

Following word late last month of a new CEO for RIDE, whose resume includes solid automotive leadership experience, shares broke out. Specifically, they bolted higher by nearly 24% on the week.

It was a start. But with shares of RIDE off nearly 80% from this year’s peak valuation, the $1.25 gain could hardly be called relief for most Lordstown investors.

The good news is more meaningful technical assistance may be on its way.

Today, a confirmed three-week long pullback pattern backed by weekly stochastics indicates that it’s time to back up the truck on this most-shorted stock. I’d go with a Nov $7.5 call and 50% money stop loss to start.

FuboTV (FUBO)

fuboTV (FUBO) higher-low formation following massive corrective bottom indicates a move into the right side of FUBO stock's base
Source: Charts by TradingView

FuboTV is the next of our most-shorted stocks to buy. Bears currently wagering against the streaming sports-centric platform comprise a hefty 18% of FUBO stock’s float.

FUBO is another name that investors betting on the under in 2021 have largely cleaned up. Today, shares are more than 50% beneath their January high.

But bears who are “in it to win it” have already been giving back their un-booked winnings. Moreover, taking the over looks like the proper game to play in this stock.

A fresh New York Jets sports betting partnership, a new key streaming deal with ROOT sports and release of on-screen stats and predictive free-to-play games with cash prizes are the latest big moves by fuboTV. Each of these supports a business strategy for solid long-term growth.

Technically, bulls playing offense this past summer have more than doubled their money off a deep Fibonacci-based Gartley bottoming pattern.

The good news for today’s investors is that those bulls haven’t even yet tackled the midfield line of this stock’s corrective cycle.

With a confirmed weekly chart higher low formation in place, breaking through the 50% level into the right side of FUBO stock’s corrective base is the next logical target. Now that’s some extra yardage to capitalize on!

Go with the Nov $30/$40 collar to bet on the over while maintaining a terrific defense.

Most-Shorted Stocks to Buy: Corsair Gaming (CRSR)

Corsair Gaming (CRSR) monthly bottoming hammer centered on lifetime 62% retracement level
Source: Charts by TradingView

The last of our most-shorted stocks to purchase is Corsair Gaming. Bears number roughly 31% of CRSR stock’s float. They’ve been on the right side of trade for virtually the entire year.

Today though, it’s a game-on situation for bulls.

Corsair is a high-performance gaming and streaming equipment company. It’s also a meme stock, but don’t hold that against CRSR.

Once in a while, there’s opportunity beyond just that kind of short-lived monkey business. And with CRSR’s attractive below-the-market valuation and double-digit growth, there’s reason to think this could be one of those rarer situations.

If seeing is believing, this stock’s monthly price chart should have bulls and apes alike excited. Technically, Corsair is closing in on confirmation of an August hammer bottoming candle centered on the stock’s lifetime 62% retracement level.

Should a rally through $30.77 occur sometime soon, a Nov $25/$40 collar spread for this most-shorted stock looks great both off and on the price chart.

On the date of publication, Chris Tyler did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Chris Tyler is a former floor-based, derivatives market maker on the American and Pacific exchanges. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.


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