Right now, the search for penny stocks with high short interest is on. Monster breakouts from Support Inc. (NASDAQ:SPRT), Vinco Venture (NASDAQ:BBIG), and even Camber Energy (NYSE:CEI) have traders hungry for more. Setting the stage for all of this earlier in the year were companies like AMC Entertainment (NYSE:AMC) and GameStop (NYSE:GME), which, at this point, are the “OGs” of the short squeeze stocks.
Flocks of retail traders have flown into the stock market this year. Thanks, in part, to pandemic shutdowns, the stocks have become a clear choice as alternatives to making money without a day job. Where else can you wake up in your pajamas, turn on your computer or smartphone, and within a few taps or clicks, make money? It’s a great question, but the answer is quite obvious for millions of people over the last few months.
Fast-forward to the second half of 2021, and “the strength of the retail trader” continues growing. Whether it’s looking for penny stocks to buy under $1 or short squeeze stocks as we’ll look at today, trends have become much different in 2020 and 2021 compared to years prior. If you’re just getting started, know that volatility and speculation are playing a larger role now. This means that moves tend to be much quicker and breakout, much bigger than in the past. The downside has also become much more volatile. Is this the case for all penny stocks? No, but when you’re looking for potential short squeeze stocks like we are today, volatility is likely a characteristic not to ignore.What Are Short Squeeze Stocks?
Without getting into a full lesson on short squeezes, let’s look at some basics. First, what is shorting? Basically, this is an event wherein a trader expects a stock to decline. To take advantage of this guess, the trader borrows shares, sells them, then hopes to repurchase them at a lower price later on, once it comes time to return the shares to the share lender. The difference between the higher selling price and the lower buyback price is the profit.What Is A Short Squeeze?
The good and bad part about shorting is that no matter the stock’s price, the short trader has 1 responsibility. That is to return the shares to their lender. The short is profitable when stocks decline. But when stocks increase, the short trader will need to buy back shares at a higher price.
In the event of a short squeeze, retail buying forces shorts to start buying back at higher prices. As the mix of short cover volume and normal retail buying comes into the market, we see these parabolic breakouts like AMC, GME, SPRT, BBIG, CEI, and countless others. The first step is finding stocks with higher short interest. Here’s a list of penny stocks to watch with this in mind.Penny Stocks With High Short Interest
- Exela Technologies (NASDAQ:XELA)
- Senseonics Holdings (NYSE:SENS)
- Antelope Enterprise Holding (NASDAQ:AEHL)
- OneSmart International Education Group (NYSE:ONE)
Shares of XELA stock have been in a wide channel for most of the summer. Aside from the big breakout in mid-July, this range is between $2.15 and $3.30. Furthermore, Exela shares have maintained this range above the 200-day moving average. I point this out because previous to this, the 200DMA was a level of resistance in May and June. As far as short interest goes, outlets are showing a percentage of the float short at roughly 20% right now.
Despite the interim volatility, XELA stock has sustained a strong move this year. So far, the move has been from around $1.20 to over $2 this month. Thanks to growing interest in commercial technology companies, Exela has taken full advantage of the latest market trend. The company provides business process automation solutions for its clients and was recently recognized as a “Major Contender” in Everest Group’s Finance & Accounting Outsourcing report. The recognition was based on Exela’s commercial platform, and customization flexibility for its client needs.
Shirley Hung, Partner, Everest Group, explained, “Exela Technologies follows a proprietary platform-led approach leveraging a suite of solutions, such as Exela P2P (an end-to-end P2P platform), BancPay™ (an intelligent cloud invoicing platform), and TMS™ (an integrated payment processing solution), which is further augmented by its partnerships with Atalasoft and Azure cloud, to offer end-to-end F&A digital transformation services.”
If you look back at XELA stock back in July, you’ll see that it’s no stranger to parabolic moves. Will the latest focus on stocks with high short interest turn a focus to it this quarter?2. Senseonics Holdings (NYSE:SENS)
Senseonics is another one of the stocks with higher short interest traders are watching right now. Unlike XELA, the overall trend for SENS stock has been a bit more consistent over the last few months. Since news of positive data from a study of its Eversense glucose monitoring system, the penny stock has been on the move.
Fast-forward to right now, and SENS stock is up more than 300% year-to-date and has been testing the $4 level over the last few weeks. One of the key drivers of speculation for the penny stock is the anticipation of upcoming information shared at the upcoming HC Wainwright Global Investment Conference on September 15th. Next week management plans to participate in the conference, hosting one-on-one meetings with investors. This comes just a few weeks have HC started coverage on Senseonics, giving a Buy rating and a $6 price target.
As for short data, the short float percentage hovers around 22%. However, compared to other stocks on this list, it has a much larger float in the hundreds of millions of shares. Will that matter to retail traders heading into next week?3. Antelope Enterprise Holding (NASDAQ:AEHL)
As far as Antelope Enterprise is concerned, the overall trend for the year is bullish. However, looking at the AEHL stock chart, you can clearly see there’s no lack of volatility. Regardless, the 200DMA has acted as a consistent level of support during that time. Whenever AEHL has tested it or even broken below, it hasn’t remained there for long. The last 3 sessions have seen the penny stock testing this technical level again as it maintains its overall uptrend.
The company sells ceramic tiles for interior and exterior use. Its products are sold under the brands TOERTO, HDL, Hendeli, HD, Hengda, and a few others. Products include rustic tiles, porcelain tiles, and glazed tiles, among others. But before you start pointing at this as a “reopening” beneficiary, there’s oddly a tech “play” to keep in mind as well. Through its wholly-owned subsidiary, Antelope Holdings (Chengdu), Co., Ltd., the company provides fintech solutions, including the development of blockchain software. Considering the excitement surrounding blockchain tech and cryptocurrencies like Bitcoin and Ethereum, AEHL has also gotten wrapped into the DeFi trend the market is seeing this year.
With short interest hovering around 24% and a float of fewer than 6 million shares, AEHL could be one of the penny stocks to watch right now.4. OneSmart International Education Group (NYSE:ONE)
Another one of the “short squeeze penny stocks” to watch right now is OneSmart. If there’s an area of interest gaining steam lately, it’s Chinese education stocks. OneSmart provides services for K-12 students via tutoring as well as language and culture programs. Despite some concern arising over for-profit education companies in China, ONE stock has experienced a shart turnaround in the market over the last few sessions. Whether or not this marks the firm shift in trend is to be seen. However, we can see that some interest is building around the stock for its technical levels and short interest.
While the short isn’t as large as some. of the other names on this list, we see that it may not necessarily need to be. Look at other “short squeeze stocks” like Camber Energy. Its short float was in the lower teens before its massive rally. That isn’t to say it compares to OneSmart. Furthermore, the float for ONE stock is considerably larger. Needless to say, with a relatively higher short interest and sub $1 price, it appears that sentiment has turned bullish at the end of this week.Penny Stocks To Watch Right Now
If you’re trading, penny stocks remember you have a goal. That is to make money. It isn’t to hold on for dear life and hope for new highs. If a trend is truly strong, then there should be plenty more opportunities to capitalize down the road. Regardless, when it comes to high volatility, “short squeeze stocks” understand that big moves in price happen quickly. Since that goes for both breakouts and breakdowns, it’s always good to remember that nobody ever went broke by taking profit off the table.