Tuesday’s premarket is trending moderately higher, with the major indices indicated up about 0.5%.
Tuesday’s premarket is trending moderately higher, with the major indices indicated up about 0.5%. Oil is drifting lower, with WTI crude off by about $2 to $87 per barrel. The 10-year yield has retreated 4 bps to 5.27% but still hugs the highest levels seen in years. While geopolitical surprises could upset the markets, the sentiment in these weeks before earnings season is decidedly bullish.
While stock selection at these levels is a tricky business, investors may help themselves a lot by turning the puzzle upside down. Instead of asking “Where’s the next good move?” ask “What is shaping up as a probable bad move?” With this exercise in mind, have a look at this selection of names that happen to be carrying extraordinarily high short interest (% according to MarketBeat):
GRPN 51%
WOLF 50%
SHOE 39%
ARQQ 35%
To be short and wrong is an expensive business, especially when the trade is crowded. Conversely, these names are worth watching for signs that the short thesis unravels. We’re already seeing tremors in WOLF.
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