More investors are interested in shorting and learning how they might benefit from a short squeeze as a result of the Reddit-fueled short squeeze on stocks like GameStop (NYSE: GME) and AMC Theaters (NYSE: AMC).
A short squeeze has the potential to create a significant amount of money in a relatively short period of time but may also compound huge losses; as a result, Finbold has analyzed the top five stocks that had the highest number of short positions as of December, according to data from Statista.
In particular, Digital Brands Groups Inc. (NASDAQ: DBGI), an American pharmaceutical firm, was the most shorted stock as of December 2022, with 60.94% of its entire float shorted.
Picks for you
The second most shorted stock as of December, with 49.49% of the float shorted, was OncoSec Medical Inc (NASDAQ: ONCS), while marginally behind in third was Mullen Automotive Inc (NASDAQ: MULN) with 47.4%. Elsewhere in fourth was Carvana Co (NYSE: CVNA), with 46.21%, and lastly, the fifth most shorted stock, Bed Bath & Beyond Inc (NASDAQ: BBBY), with 46.2%, respectively.
1. Digital Brands Groups Inc. (NASDAQ: DBGI) – 60.94% short interest
The long-term trend is positive, and the short-term trend is neutral, with the stock at $3.99 +0.01 (+0.25%). In the last month, DBGI has been trading in the $3.21 – $9.39 range and is currently trading near the lows of this range.
Digital Brands Groups does present a solid setup opportunity as there has been reduced volatility while prices have been consolidating in the most recent period, and there is very little resistance above the current price, with resistance at $6.25 from a trend line in the daily time frame.
2. OncoSec Medical Inc (NASDAQ: ONCS) – 49.49% short interest
ONCS finished trading on Friday, December 9, at $1.84 -$0.27 (-12.8%). In the last month, OncoSec Medical has been selling in the $1.77 – $6.50 range and is currently trading near the lows of this range.
The short- and long-term trends are negative, with the stock trading below all its daily averages. Given that prices have been falling firmly lately, it is better to avoid new long positions here.
3. Mullen Automotive Inc (NASDAQ: MULN) – 47.41% short interest
The overall market performance of Mullen is poor, and the outlook for the company over both the medium and short terms is pessimistic. There are 33 other companies in the automobile industry besides MULN, and of those 33 stocks, 82% are doing better than Mullen Automotive.
On December 9, MULN closed at $0.198 +$0.01 (+3.88%), and in the last month, MULN has been trading in the $0.18 – $0.33 range. When analyzing resistance, we notice a resistance line at $0.20 from a trend line in the weekly time frame and another resistance line at $0.26 from a trend line in the daily time frame.
4. Carvana Co (NYSE: CVNA) – 46.21% short interest
Carvana finished trading at $5.05 +$0.09 (+1.81%) on December 9. Notably, the volume has been considerably higher in the last couple of days; in combination with the strong move down, this is a bearish signal.
Indeed, prices have been falling firmly lately, so it would be prudent to avoid new long positions here. In the last month, CVNA has been trading in the $3.55 – $11.90 range and is currently trading near the lows of this range. The stock is now trading below all its daily moving averages, indicating that both the short-term and long-term trends are bearish.
5. Bed Bath & Beyond Inc (NASDAQ: BBBY) – 46.2% short interest
Bed Bath & Beyond was also one of the most shorted stocks in November, finished trading at $3.08 -$0.25 (-7.51%) on December 9. In the last month, BBBY has been trading between $2.96 – $4.18, and the stock is currently trading near the lows of this range.
That said, prices have been consolidating lately, the volatility has been reduced, and there is very little resistance above the current price.
Resistance is observed at $3.23 from a trend line in the daily time frame, while there is a resistance zone from $3.34 to $3.34 formed by a combination of multiple trend lines and important moving averages in the daily time frame.
Bear in mind that engaging in short selling is a high-risk activity that must be carried out with the necessary care and attention to avoid any adverse outcomes.
Check Finbold’s research of the ten most shorted stocks in November to better understand trading equities with a large share float as the year concludes.
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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
