In a mixed bag of performance on Wall Street this week, the market’s top of the heap, most-shorted stocks are making similar, but more powerful price statements.
Today, let’s examine some of the drivers off and on the price chart of these vilified companies, then determine which of the bulls and bears are overreacting and which are onto something more significant going forward.
It’s been an interesting five day period for investors with fairly wide divergence in the broader stock barometers. The same goes for back alleys like the market’s most-shorted stocks.
Inside Friday’s session, the price discrepancy covered for about 15 or so seconds on the nightly news is best reflected by the tech-heavy Invesco QQQ Trust (NASDAQ:QQQ) and blue-chip SPDR Dow Jones Industrial Average ETF (NYSEARCA:DIA).
For the former’s gadget and growth-loving investors, new highs on the back of gains in excess of 2.5% are being enjoyed this week. Alternatively, the more cyclical, value-oriented Dow is off a full percentage point.
Similarly, the market’s podium-worthy most-shorted stocks are here, there and everywhere, but in even more dramatic fashion:
Today, let’s take a look at three of these most-shorted stocks, the reports driving bulls and bears batty, and how the long-game is shaping up on those price charts.
Most-Shorted Stocks Making Moves: Big 5 Sporting Goods (BGFV)
Source: Charts by TradingView
The first of our most-shorted stocks making moves this week is Big 5 Sporting Goods. The near $600 million bricks-and-mortar athletics and outdoors retailer sits in the top spot among small caps with high short interest at 41.7%.
And the bears have come out to play for the five-day period with shares of BGFV tanking 39%. Behind the pressure in BGFV? You may have to chalk it up to the full Beaver Moon.
Investors would be hard-pressed to find an actual story worthy of this most-shorted stock’s carnage. In fact, the only item even able to factor into just a small part of the loss is of actual benefit for shareholders.
This week BGFV went ex-dividend on both a regular quarterly dividend of 25 cents and special one-time thank you to investors of $1 per share.
Looking forward the bigger thanks is the bears slamming this most-shorted stock into long-term trend and Fibonacci support.
Along with stochastics flirting with oversold readings on the monthly chart, BGFV is shaping up like a value proposition and an area to begin accumulating shares within the bullish trend.
Beyond Meat (BYND)
Source: Charts by TradingView
Beyond Meat is the next of our most-shorted stocks making a larger move this week. As with BGFV stock, BYND shares are in the red, but this is the bear’s ball to drop. And I doubt they will.
This most-shorted stock’s more modest follow-through drop of 9% comes on the heels of the prior week’s bearish swat of nearly 15% in response to a mostly awful earnings report.
Importantly, the latest weak price action also warns there’s much more to come.
The retreat indicates BYND stock’s slightly growing resident bear population of 30.4% is on the right side of a now confirmed neckline failure on the monthly perspective.
As proffered a week ago, this most-shorted stock could be a continued bearish trend towards $45 – $50.
That observation now appears increasingly likely given this week’s failure. And in tow, that should spell a growing opportunity for bears to sink their teeth profitably into Beyond Meat shares.
Most-Shorted Stocks Making Moves: Blink Charging (BLNK)
Source: Charts by TradingView
The last of our most-shorted stocks busting a larger move are shares of Blink Charging. Shares of the $1.83 billion EV charging play are up about 9% on top of the prior week’s sizable 27% gain.
But this heavily shorted name looks charged to power even higher despite, and with the help of, its 36% short interest.
On Monday, assisting with the follow-through, boutique investment firm H.C. Wainwright revised BLNK stock to a “buy” and slapped an above-the-market price target of $50 on shares.
Depending on whom one asks, blame or thank President Joe Biden’s infrastructure bill, which allocates roughly $7.5 billion towards building out EV charging networks and proposed tax breaks for EV purchases for the share’s jumpstart.
Technically, this most-shorted stock offers buying shares as they cross through into the right side of BLNK’s year-long corrective base after a failed first attempt back in the spring.
Today, with shares squarely on the midfield line of the base and an oversold stochastics just now signaling a bullish crossover, it’s game on for Blink Charging’s bullish fanbase.
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.
