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The EV Market’s Most-Shorted Stocks to Buy

most-shorted stocks - The EV Market’s Most-Shorted Stocks to Buy

Source: PopTika / Shutterstock.com

It’s a life in the fast lane for traders involved in the market’s most-shorted stocks. And maybe more so now with today’s notorious Reddit population of bullish apes driving shares.

Still, buying into this caliber of stock and the fantastic scheming that goes along with it is far from a one-way street lined with bullish profits.

One prime example of that reality are the many popular, diverse and heavily-shorted EV-related plays whose price action has turned investors overstaying their welcome into crash test dummies.

The fact of the matter is that common and mind-blowing gains captured in 2020 as these most-shorted stocks came into their own vis-à-vis a massive global push into green energy, as well as generous promotion from Wall Street, has taken a nasty detour or two on the price charts.

  • Romeo Power  (NYSE:RMO)
  • Fisker Inc (NYSE:FSR)
  • QuantumScape (NYSE:QS)

Today and in the spirit of looking forward in a positive way rather than bearishly in the rearview mirror, let’s look at three of these most-shorted stocks ready for some “vroom, vroom” heading into 2022.

EV’s Most-Shorted Stocks to Buy: Romeo Power (RMO)

Romeo Power (RMO) year-long crash to all-time-lows sets up back-up-the-truck scenario in RMO stock
Source: Charts by TradingView

The first of our most-shorted stocks to trade is commercial electric battery specialist Romeo Power.

Shares of RMO harbor short-interest of 30%. And to be fair, the bears have been on the right side of trade in 2021.

The stock has surrendered 83% and is just off all-time-lows struck earlier this month.

Still, it could be a smart time for investors to consider a purchase in this most-shorted stock.

RMO is one of those EV stocks operating successfully in the real world. The outfit has already landed one high profile client in its battery deal with big rig manufacturer PACCAR (NASDAQ:PCAR).

What’s more, this most-shorted stock is starting to bring in sales today and not way down the road. In fact, back in November RMO stock delivered a solid top and bottom-line quarterly beat.

Bears might argue RMO’s revenues are still puny at $5.8 million. Still, it’s a big step in the right direction over the prior year’s sales take of just $675,000.

Also, this most-shorted stock’s management backed up the strong results inferring top-line growth will extend in the coming quarters on the back of four supply contracts which began this year.

Technically and as this year’s performance outlined above hints at, bears haven’t begun pumping the brakes to stop a decline in shares. But you also can’t squeeze juice from a turnip, right?

Bottom line, at a small-cap valuation of $500 million and price tag of $3.75, this most-shorted stock is worth putting on the radar for buying.

And confirmation of a monthly bottoming candle come early January, could turn into one of next year’s nicer-looking back-up-the-truck situations for RMO stock investors.

Fisker (FSR)

Fisker (FSR) monthly testing position of support within uptrend channel backed by stochastics
Source: Charts by TradingView

The next of our most-shorted stocks to buy are shares of soon-to-be luxury EV designer Fisker.

FSR stock currently maintains a bear population of 26%, and in our estimation imminent roadkill on the price chart.

Bottom line, Fisker’s Ocean series looks like the real deal when production commences in late 2022 based on its all-around eco-friendly attention to detail and what’s under the EV’s hood.

Further and tied to the top-line, based on estimated revenues of $2.2 billion for 2023, shares of this most-shorted stock look outright cheap compared to the competition with a price of just around 3x sales.

Technically and as the illustrated monthly view of FSR stock reveals, shares have pulled back into a testing position of uptrend and Fibonacci support.

And with the price action also backed by a bullish stochastics crossover in oversold territory, this most-shorted stock is ready for more than just a test drive today.

EV’s Most-Shorted Stocks to Buy: QuantumScape (QS)

QuantumScape (QS) testing angular support on monthly chart
Source: Charts by TradingView

The last of our EV and most-shorted stocks to trade are shares of QuantumScape with short interest of 13%.

QuantumScape’s next-gen solid state technology has been hailed as the Jesus Battery for electric vehicles. The start-up also has the backing of Volkswagen (OTCMKTS:VWAGY) and Microsoft (NASDAQ:MSFT) CEO Bill Gates.

Nice, right? It is. Importantly though, it’s also still way too early to know if the excitement over what QS stock might bring to the table actually lives up to its billing.

In fact, if all goes according to plan, investors shouldn’t expect to see a real world product prior to 2024 or possibly 2025.

Also, it’s fair to say the world’s largest auto manufacturer and one of the wealthiest individuals on the planet can afford to lose on private investments in QuantumScape well before QS became a most-shorted stock.

Still, while QS stock isn’t offering ordinary investors an opportunity to not get in on the same ground floor, a technical floor on this most-shorted stock’s weekly price chart looks great for buying into.

I’d suggest waiting for this past month’s testing of angular support to be confirmed with a weekly bottoming candle before buying QS stock. Also, a bullish crossover signal from an oversold stochastics indicator prior should back up the price action.

Should those conditions be met, a hedged married put looks like a great starting position for a notoriously volatile most-shorted stock which should enjoy a bullish bias, while giving investors the ability to avoid becoming a crash test dummy.

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.


Article printed from InvestorPlace Media, https://investorplace.com/2021/12/the-ev-markets-most-shorted-stocks-to-buy/.

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